NAMA Property Leases

Questions (70, 71)

Peadar Tóibín

Question:

70. Deputy Peadar Tóibín asked the Minister for Finance in view of the state of the public finances, if he will make a direction to National Asset Management Agency to have leases in which Departments or State agencies are the tenants, reviewed to reflect current market value. [12164/13]

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Peadar Tóibín

Question:

71. Deputy Peadar Tóibín asked the Minister for Finance if he will detail in tabular form the leases for which National Asset Management Agency has an interest, where a Department or State agency is the tenant; and if he will give details to include location, identification of State agency, annual leasing cost, if the lease includes an upward only rent clause, owner, lease start date and lease term time. [12167/13]

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Written answers (Question to Finance)

I propose to take Questions Nos. 70 and 71 together.

As the deputy is aware, NAMA has acquired loans from the five participating institutions and is not the owner/manager of properties. The Agency’s role is that of a secured lender. Properties securing NAMA’s loans continue to be owned and managed by their existing owners or, in the case of enforcement, on their behalf by duly appointed insolvency practitioners. I am advised by NAMA that there are NAMA debtors and appointed insolvency practitioners who own/manage properties which are leased to State Agencies and who derive income from them. The properties are leased to the State by these debtors/appointed insolvency practitioners on an arms-length basis. NAMA has no legal role in relation to the contracts between property owners/appointed insolvency practitioners and third parties. Any discussion on rent reviews is a matter between for the property owner/appointed insolvency practitioner and the tenant, and these discussions will be dealt with on a commercial basis and in accordance with the NAMA Guidelines. The Deputy is aware that NAMA, in its role as secured lender, is agreeing rent abatements through its debtors and insolvency practitioners to support small businesses around the country that are struggling to survive because of the current economic environment.

NAMA advises that the income arising from the rental by state bodies of approximately 82 NAMA debtor and insolvency practitioner properties is of the order of €30 million per annum. NAMA advises that 48 properties are located in Dublin and the neighbouring counties of Wicklow, Kildare and Meath; these account for 76% of total rental income. There are 24 properties located in counties Limerick, Cork and Galway and these account for a further 21% of total income. The residual properties are located throughout the rest of Ireland and account for 3% of rental income. The further breakdown by number and county sought by the Deputy would lead to the identification of specific properties, breaching Sections 99 and 202 of the NAMA Act, under which NAMA is prohibited from disclosing confidential details relating to its debtors or their properties, and the obligation on its debtors and insolvency practitioners to uphold the confidentiality of agreements entered into with third parties. In addition, details regarding the terms and duration of individual leases cannot be divulged for reason of commercial sensitivity.

The Deputy is aware that NAMA’s mandate is to achieve the best possible return for the taxpayer from the management and sale of its acquired bank assets and that the NAMA Board has a mandate to independently frame its decisions in this context. Given the independence afforded to NAMA by the NAMA Act, I have no role as Minister for Finance in relation to strategies applied by NAMA to maximise income generation from individual assets securing its loans and to ensure that interest and principal on the debt are repaid by a debtor.

Property Taxation Exemptions

Questions (72)

Joanna Tuffy

Question:

72. Deputy Joanna Tuffy asked the Minister for Finance if he will make any provision for exemption from property tax for persons who are part of the fair deal (details supplied); and if he will make a statement on the matter. [12170/13]

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Written answers (Question to Finance)

While no specific exemption from local property tax for individuals in the Health Service Executive Fair Deal Scheme is provided in either the Finance (Local Property Tax) Act 2012 or the Finance (Local Property Tax) (Amendment) Bill 2013 the legislation does provide for a number of exemptions from the Local Property Tax (LPT) as well as for the possibility of deferring the charge in certain cases of inability to pay.

I am informed by the Revenue Commissioners that the exemption which seems to be most relevant to the Deputy’s question would appear to be section 5 of the 2012 Act under which an exemption may be obtained where a property that was previously occupied by a person as his or her sole or main residence has been vacated by the person for 12 months or more due to long term mental or physical infirmity. An exemption may also apply where the period is less than 12 months, if a doctor is satisfied that the person is unlikely at any stage to return to the property. In both cases, the exemption applies only where the property is not occupied by any other person. I am also advised by the Commissioners that where a property is owned by more than one person, the owners are jointly and severally liable for the payment of the tax. Accordingly, this exemption under section 5 of the Act would not apply if the property in question was jointly owned with others.

Details of the existing exemptions and options for deferral are available on Revenue’s website www.revenue.ie, where the Commissioners have recently published a useful Guide to Local Property Tax. This will be revised shortly to take account of the provisions of the Finance (Local Property Tax) (Amendment) Bill 2013.

Disabled Drivers Grant Eligibility

Questions (73)

Denis Naughten

Question:

73. Deputy Denis Naughten asked the Minister for Finance the implications, if any, of the recent announcement on the eligibility for VRT rebate for persons with mobility difficulties; and if he will make a statement on the matter. [12248/13]

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Written answers (Question to Finance)

I understand the Deputy to refer to the recent announcement by the Minister for Health on the ending of the Motorised Transport Grant and Mobility Allowance schemes. There are no implications with regard to eligibility for VRT rebate for persons with mobility difficulties under the Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme, the details of which are set out as follows. The Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme provides relief from VAT and VRT (up to a certain limit) on the purchase of a car adapted for the transport of a person with specific severe and permanent physical disabilities, to those who meet certain disability criteria.

The disability criteria for eligibility for the tax concessions under this scheme are set out in the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994. To get the Primary Medical Certificate, an applicant must be severely and permanently disabled and satisfy one of the following conditions: be wholly or almost wholly without the use of both legs; be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs; be without both hands or without both arms; be without one or both legs; be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg; or have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.

Banking Sector Remuneration

Questions (74)

Michael McGrath

Question:

74. Deputy Michael McGrath asked the Minister for Finance if he has received a copy of the Mercer report on remuneration in the banking sector; the date on which he intends to present the report to Cabinet; his plans for publishing the report; the timetable he envisages for implementation of its recommendations; and if he will make a statement on the matter. [12249/13]

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Written answers (Question to Finance)

My Department is in final discussions with the consultants on the report. I expect to bring it to Government imminently for decision. I fully recognise that there is a real public interest in the levels of remuneration at the Covered Institutions and I will endeavour to have the details underpinning the review published as soon as possible thereafter.

Tax Compliance

Questions (75)

Michael McGrath

Question:

75. Deputy Michael McGrath asked the Minister for Finance the number of pension schemes whose trustees have not made payment in respect of the 2011 and 2012 liability; and if he will make a statement on the matter. [12250/13]

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Written answers (Question to Finance)

I am informed by the Revenue Commissioners that the pension levy is a self assessment tax. The chargeable person and the trustees of the pension scheme are both jointly and severally liable for the payment of the pension levy. In the case of assets held under contracts of assurance, the chargeable person is the insurer. In the case of any other assets the administrator is the chargeable person. A chargeable person is entitled to dispose of or appropriate scheme assets for the purpose of meeting the amount of the levy payable. The Pension Levy is charged at a rate of 0.6% on the aggregate of the market value of assets of a pension scheme at the valuation date. Assets include all property, investments, deposits, debts and contracts of assurance held for the purpose of a scheme.

In 2011 and 2012 Revenue initiated enquiries by means of a compliance program to establish if any amounts of levy remain unpaid and with a view to taking appropriate action where any such cases are identified. The evidence to date from the programme suggests that the legislation is largely being complied with. A small number of cases have been found where incorrect levy amounts, both overpayments and underpayments, were paid. The amounts involved were in general not very material. Any chargeable person who fails to comply with the legislation has to pay, as well as the pension levy, a daily penalty charge and interest calculated from the due date until the payment date.

Mortgage Arrears Proposals

Questions (76)

Michael McGrath

Question:

76. Deputy Michael McGrath asked the Minister for Finance if he has had any indications from mortgage lending institutions of an intention on their behalf to change their current approach to home repossessions; and if he will make a statement on the matter. [12251/13]

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Written answers (Question to Finance)

The Central Bank, under its MARs project, has for some time been intensively working with lenders to ensure that they can offer a range of longer term options to their customers who are experiencing mortgage difficulty. These can include mortgage-to-rent, trade-down mortgages, equity participation, interest rate reduction, split mortgages and sale by agreement, or other appropriate options as may be developed by lenders. In addition, the Central Bank’s Code of Conduct on Mortgage Arrears is a key framework that governs the relationship between mortgage holders experiencing difficulty and their bank and it offers very worthwhile protections for mortgage holders who are in arrears or pre-arrears. The Code provides that a mortgage lender must, in the case of mortgage difficulty, consider all options for alternative repayment arrangements and must not apply to the Courts to commence legal action for repossession of the borrower’s primary residence until every reasonable effort has been made to agree an alternative arrangement. It also provides that where a borrower co-operates with the lender, the lender must wait at least twelve months from the date the borrower is classified as a MARP case before applying to the Courts. However, provision 48 of the Code outlines the circumstances, for example where the borrower does not cooperate with the lender, where the twelve month moratorium on the initiation of Court actions will not apply.

The Deputy may also wish to note that the Central Bank has commenced a review of the Code of Conduct on Mortgage Arrears, which will shortly involve a public consultation process, to take account of recent developments, such as the new personal insolvency legislation. Subject to compliance with this Code, it is a matter for lenders to take the legal actions it considers necessary to protect and enforce its rights as provided for in mortgage law and contracts.

State Banking Sector

Questions (77)

Michael McGrath

Question:

77. Deputy Michael McGrath asked the Minister for Finance if he will set out in tabular form the current value ascribed to each of the State's investment holdings in Bank of Ireland and Allied Irish Bank; and if he will make a statement on the matter. [12252/13]

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Written answers (Question to Finance)

As previously disclosed the gross bank recapitalisation commitments made by the State in Allied Irish Bank (AIB) and Bank of Ireland (BOI) to date are set out in the following table:

€bn

AIB/EBS

BOI

Total

Government preference Shares (2009) - NPRF

3.5

3.5*

7.0

Capital contributions (with Promissory Notes as consideration)/Special Investment Shares (2010) – Exchequer

0.9

-

0.9

Ordinary Share Capital (2010) - NPRF

3.7

3.7

Total pre-PCAR 2011 (A)

8.1

3.5

11.6

PCAR 2011:

AIB/EBS

BOI

Total

Capital from Exchequer**

3.9

-

3.9

NPRF Capital

8.8

1.2

10.0

Total PCAR (B)

12.7

1.2

13.9

Total Cost of Recap for AIB & BOI (A) + (B)

20.7

4.7

25.4

* €1.7bn of BOI’s government preference shares were converted to equity in May/June 2010 (€1.8bn still left in existence). The government also received €0.5bn from the warrants relating to BOI’s preference shares (excluded from table above). In addition the State received €1.1bn stock coupons from BOI and AIB relating to the Government Preference shares.

** The Exchequer cost of the 2011 BOI recap is shown net of share sale to private investors (Completed in October, 2011).

As the Deputy will be aware, the State successfully disposed of the €1.0 billion Contingent Capital instruments in Bank of Ireland in January 2013 at a profit of €10m, while previously we received €0.5bn from the sale of our warrants in the bank. These disposals and other receipts from dividends and coupons are not reflected in the headline figures shown in this table. The State’s remaining investments in these two banks consist of a 99.8% equity stake in AIB, a 15% stake in BOI, preference shares with a nominal value of €3.5bn in AIB and €1.8bn in BOI and Contingent Capital in AIB of €1.6bn.

The most recent valuation of these holdings is contained in the NPRF 2011 Annual Report published on the 19th July 2012. As at the 31st December 2011, the NPRF valuation of its investments in AIB was €6.1bn, comprising preference shares of €2.2bn and ordinary shares of €3.9bn (the Contingent Capital is held by the Minister directly). Its investments in BOI were valued at over €1.8bn consisting of preference shares of almost €1.5bn and ordinary shares c.€0.4bn.

The value of the State’s remaining bank investments is understood to have improved since then as evidenced by the recent strength in BOI’s share price. As of 5th March 2013, it was at 14c per share versus 8c at the end of 2011.

Table from NPRF Annual Report

Directed Portfolio 31 December 2011

Valuation €m

% of Directed Portfolio

Allied Irish Banks

3,500 million preference shares

2,224

27.9

513 billion ordinary shares

3,896

48.9

Total Allied Irish Banks

6,119

76.9

Bank of Ireland

1,837 million preference shares

1,473

18.5

4,512 million ordinary shares

370

4.6

Total Bank of Ireland

1,843

23.1

Cash

0

0

Total Directed Portfolio

7,962

100.0

Figures may not total due to rounding

Source: NTMA

Budget 2013

Questions (78)

Seán Kyne

Question:

78. Deputy Seán Kyne asked the Minister for Finance if consideration has been given to enabling a citizen who is experiencing financial difficulties to access previously made pension contributions in a similar manner to the access being granted by the Finance Bill to AVC funds for the sole purpose of alleviating a mortgage arrears problem. [12273/13]

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Written answers (Question to Finance)

In my Budget 2013 speech, I announced that I would make provision in Finance Bill 2013 for persons making Additional Voluntary Contributions (AVCs) used to supplement their main scheme retirement benefits to withdraw up to 30% of the value of those contributions. Any amounts withdrawn will be subject to tax at the individual’s marginal rate. The option will be available for 3 years from the passing of the Finance Bill. This is a restricted measure which will enable rather than incentivize certain individuals to access part of their pension savings beyond their regular or compulsory pension contributions. I do not wish to damage future pension provision and it is important that individuals continue to provide for their retirement. For these reasons, I have no plans to extend the measure beyond AVCs.

Universal Social Charge Payments

Questions (79)

Jack Wall

Question:

79. Deputy Jack Wall asked the Minister for Finance further to Parliamentary Question No. 278 of 5 February 2013, if the position remains unchanged; if tax is still being deducted from a person (details supplied) in County Kildare; and if he will make a statement on the matter. [12281/13]

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Written answers (Question to Finance)

I have been advised by the Revenue Commissioners that they have again contacted the pension provider on this matter. The pension provider has confirmed that USC deducted was repaid to the person concerned on 22 February 2013. In addition, the pension provider has also confirmed that there will not be any tax or USC deducted from the next and following payments.