Dáil Éireann Debate, Thursday - 21 March 2013
99. Deputy Maureen O'Sullivan asked the Minister for Finance if he will consider Mandate's call for a deferral of the property tax in order to protect the retail industry, protect homeowners in distress, and consumer spending; if he will consider introducing alternative revenue raising measures that will be less damaging to the economy; and if he will make a statement on the matter. [14581/13]
View answerThe introduction of the Local Property Tax will deliver significant economic and fiscal reform by broadening the revenue base to pay for vital public services in a manner that does not directly impact on employment. In that way, it will contribute significantly to meeting the immediate financial requirement of the EU-IMF programme. It will be fair and progressive, with the owners of the most valuable properties paying the most property tax. It is part of a broader approach to the taxation of property, the aim being to replace some of the revenue from transaction based taxes, which have proven to be an unstable source of Government revenue, with an annual recurring property tax, which international experience has shown to be a stable source of funding. The key objective of the Government is to support the creation of jobs. This was evident in the supports included in the Budget and in the recent Finance Bill for small and medium sized enterprises.
As regards homeowners in distress, when introducing the Local Property Tax the Government had due regard to issues such as ability to pay. Owner occupiers whose income is below the applicable threshold – €15,000 for a single person and €25,000 for a couple – are eligible for a full deferral of their LPT liability. Those whose income is €10,000 above these thresholds are eligible for a partial deferral of their LPT liability. These thresholds can also be increased by 80% of any mortgage interest payable up to the end of 2017. Where a liable person no longer satisfies the necessary conditions, amounts deferred prior to the date on which eligibility ceased may continue to be deferred. In all cases, interest will be charged on LPT amounts deferred at a rate of 4% per annum. The deferred amount, including interest, will attach to the property and will have to be paid before the property is sold or transferred. New provisions in the Finance (Local Property Tax) (Amendment) Act 2013 provide that a person who has entered into an insolvency arrangement under the Personal Insolvency Act 2012 may apply for deferral of the LPT that is due during the period for which the insolvency arrangement is in effect. The 2013 Act also provides that a person who suffers an unexpected and unavoidable significant financial loss or expense, as a result of which he or she is unable to pay their LPT without causing financial hardship, may apply for full or partial deferral.
I am informed by the Revenue Commissioners that, for those who do not qualify for deferral of the tax, a number of different payment options have been put in place to assist people in meeting their Local Property Tax (LPT) obligations, including the facility to pay by cash. This will allow liable persons to pay their LPT liability in full or to pay the tax for 2013 in equal instalments over the period 1 July 2013 to the end of December 2013. Revenue's strategy in this regard is to ensure taxpayers have a choice of payment options available to them from which they can choose the method which is most suited to their individual circumstances. I am satisfied that the provisions in the legislation with regard to deferral of liability are suitably targeted at cases of need, and that the tax itself will neither adversely impact on employment nor hinder economic growth in the economy. Accordingly, I am not considering a postponement of the introduction of the tax at this time.
