Michael Healy-Rae
Question:60. Deputy Michael Healy-Rae asked the Minister for Finance the position regarding probate (details supplied); and if he will make a statement on the matter. [18215/13]
View answerTax Collection
Questions (60)
Written answers
I am informed by the Revenue Commissioners that the examination of the documentation in the case referred to is close to completion, and that the executor was advised of this earlier this week. The delay in completing the examination is regretted, and has been exacerbated due to the size and complexity of the estate. Revenue has recently been advised of significant additional assets in the estate, which require further examination. Revenue will expedite the examination and conclude the case when outstanding issues have been addressed. In the meantime, Revenue will keep the agent and executor updated on progress. The probate documentation was received in Revenue in early November 2012.
Property Taxation Collection
Questions (61)
Bernard Durkan
Question:61. Deputy Bernard J. Durkan asked the Minister for Finance the options available to a person (details supplied) in County Kildare in respect of the payment of the local property charge; and if he will make a statement on the matter. [18014/13]
View answerWritten answers
I am informed by the Revenue Commissioners that a wide range of different payment options have been put in place to assist people in meeting their Local Property Tax (LPT) obligations, including phased payments and the facility to pay by cash. 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. If the person in question is concerned about his/her ability to pay LPT in a single payment then he/she may wish to consider one of the phased payment options that spreads payment in instalments across the year. The various payment options are detailed in ‘Chapter 11’ of the Revenue booklet ‘Your guide to Local Property Tax’. For example, LPT can be deducted at source on a phased basis from salaries or occupational pensions or from certain payments from the Department of Social Protection. The Revenue Commissioners advise that, where deduction at source is chosen, there is no additional administration or interest charge.
Payments can also be made by direct debit from current accounts in banks and other financial institutions including credit unions. In addition, liable persons can avail of phased payment facilities through Revenue-approved third party payment service providers, which are An Post TaxPay, Payzone and Omnivend. These service providers, each of which has extensive nationwide outlets, will accept either full or phased payments in cash or by debit/credit cards. Charges are however imposed by the payment service providers on a per transaction basis. I am advised that An Post levies a charge of €1 per transaction, while Omnivend charges a fee of 4% per transaction. I understand that Payzone will be introducing the following charges this week: 75 cent per transaction for payments up to €50, €1 per transaction for payments between €50.01 and €100 and €2 per transaction for payments over €100.
The person in question may qualify for either a full or partial deferral of LPT as provided for by the Finance (Local Property Tax) Act 2012. Chapter 12 of the Revenue booklet ‘ Your guide to Local Property Tax’ sets out in detail the various types of deferral that are available and Revenue has also published extensive guidelines on the various types of deferrals, including examples, on its website www.revenue.ie. To qualify for a deferral, the person’s residential property must be occupied by him/her as a sole or main residence. The income thresholds for a full deferral are €15,000 for a single person or widow/er and €25,000 for a couple, whether married persons, civil partners or cohabitants. An increased income threshold of 80% of mortgage interest payments may also apply if the person’s property is subject to a mortgage.
The Deputy should note that deferral is not an exemption. Payment of the tax is deferred, meaning that it becomes payable later and carries an interest charge at a rate of 4% per annum on all amounts of LPT that are deferred. Any deferred amount, including interest, will be a charge on the property and will have to be paid to Revenue on any future sale/transfer of the property.
Property Taxation Application
Questions (62)
Michael McGrath
Question:62. Deputy Michael McGrath asked the Minister for Finance if a landlord's company, which has been set up for the purposes of managing rental properties and when the company is the owner of the residential properties, is liable for the local property tax; and if he will make a statement on the matter. [18015/13]
View answerWritten answers
Based on the information provided by the Deputy it is not possible to give a definitive reply. However, by way of general information the following may be of relevance in this case. I have been informed by the Revenue Commissioners that the liable person in relation to a residential property is generally the owner of the property for the purposes of the charge to LPT. This is on the basis that he or she has the right to immediate possession of the property or is entitled to receive the rent if the property is rented rather than occupied by the owner. However, in a situation where an owner has given a substantial interest in his or her property to another person, that other person may become the liable person instead of the owner. This would happen, for example, where the owner has leased the property to a lessee/tenant for a period of at least 20 years.
In this case, the Deputy has indicated that the company is the owner of the properties so, assuming that it has not created at least a 20-year leasehold interest in these properties, it would appear to be the liable person. On the other hand, if the landlord is the owner of the properties and has merely engaged his or her company to manage the properties without conveying an interest of at least 20 years in the properties to the company, the landlord would be the liable person.
Banking Operations
Questions (63)
Seán Fleming
Question:63. Deputy Sean Fleming asked the Minister for Finance his views on when State supported banks reach agreements with individuals regarding restructuring and writing down their loans and when these agreements are subject to confidentiality agreements, if this information will be passed on by the banks for credit reference purposes or will these individuals who had loans written down continue to have good or clear credit ratings notwithstanding the write down of their loans; and if he will make a statement on the matter. [18022/13]
View answerWritten answers
The State supported banks have provided me with the following information.
Bank of Ireland
In certain cases Bank of Ireland will require a customer to sign a Confidentiality Agreement prior to entering into discussions in relation to the formulation of alternative arrangement/restructuring. The reason for this is that Bank of Ireland treats customers on a case by case individual basis and, especially in cases of particular sensitivity, we wish to ensure that the subject matter of the arrangement is confidential between the Bank and the customer. Where appropriate and depending on the nature of the individual case the Bank may communicate to a credit reference agency relevant details concerning the status of the credit relationship between the Customer and the Bank.
AIB
All bank correspondence/interactions with borrowers are treated confidentially. AIB complies with its reporting obligations to the Irish Credit Bureau. However, the bank cannot comment on how the information provided is used by the Irish Credit Bureau.
PTSB
Permanent TSB has confirmed that it does not ask customers to sign non-disclosure agreements in respect of restructurings. Permanent TSB provides information to the Irish Credit Bureau in compliance with its reporting obligations.
Banking Sector Remuneration
Questions (64)
Seán Fleming
Question:64. Deputy Sean Fleming asked the Minister for Finance his views on whether there should be a reduction in pay levels in the State supported banks; if this should apply to persons above certain pay levels and be directed at those on high pay or if this should be directed at persons at lower and medium pay scales in the banks; and if he will make a statement on the matter. [18028/13]
View answerWritten answers
When publishing the Review of Remuneration Practices and Frameworks at the Covered Institutions, on 12 March 2013, I indicated that the Government had formed the view that with the remaining covered institutions still incurring losses it was an inescapable conclusion that the cost base of the institutions needs to be reduced further. This is essential if they are to return to profitability, be in a position to support the economy and repay the State’s investment through a return to private ownership. On behalf of the Government, I have now directed the banks to come up with plans as to how they intend to address this issue in a manner that can help meet the State’s objectives. I expect the value of those plans to mean a saving of 6% - 10% of total remuneration costs, through reductions in payroll and pension benefits, new working arrangements and structures that deliver efficiency gains. Tackling the cost base is of course only one of many goals that need to be achieved but combined with other measures will deliver the required results.
I, and the Government, acknowledge that the sacrifices and changes made by bank employees to date at all levels and recognise that this has been achieved without major industrial unrest in what is a critically important sector. However, it can never be forgotten by management and employees of these banks – both past and present – that without enormous cost to Irish taxpayers these institutions would not have survived and that this needs to be borne in mind during future discussions. If remuneration costs are to be reduced with the aim of a return to profitability then sacrifices at all employee levels will be required.
Question No. 65 answered with Question No. 57.
Household Charge Collection
Questions (66)
Seán Fleming
Question:66. Deputy Sean Fleming asked the Minister for Finance the procedures in place to collect the unpaid household charge and the way this will be collected under the new local property tax; and if he will make a statement on the matter. [18048/13]
View answerWritten answers
I am informed by my colleague, the Minister for the Environment, Community and Local Government, that under the Local Government (Household Charge) Act 2011 an owner of a residential property on the liability date is liable to pay the Household Charge, unless otherwise exempted or entitled to claim a waiver. It is a matter for an owner of a residential property to determine liability and pay the charge. The Local Government Management Agency is administering the Household Charge system on a shared service/agency basis for all county and city councils. The agency has been working with the Revenue Commissioners to support the introduction of the Local Property Tax (LPT), including in relation to arrangements under section 156 of the Finance (Local Property Tax) Act 2012, which concerns the treatment of Household Charge arrears. The arrears of the Household Charge for 2012 will be capped at €130 if paid to the Local Government Management Agency by 30 April 2013.
I am advised by the Revenue Commissioners that they will receive the final register of those who have paid the Household Charge by 1 July later in the year. Where the Household Charge for 2012 has not been paid by 1 July 2013 the arrears amount will be converted into LPT and collected through the LPT system. Revenue will pursue this additional liability when the LPT system is fully operational. Interest and penalties under the LPT system will apply to the additional €200. It is in the interest of all those who have not yet paid the Household Charge to do so as promptly as possible, or they will end up with an additional LPT liability.
Property Taxation Administration
Questions (67, 71, 72)
Seán Fleming
Question:67. Deputy Sean Fleming asked the Minister for Finance the number of persons who will be liable for local property tax on a number of residential properties; the number of properties to be covered for which local property tax will be paid; the number of letters that have been issued to date; and if he will make a statement on the matter. [18049/13]
View answerSeán Fleming
Question:71. Deputy Sean Fleming asked the Minister for Finance the number of letters issued by the Revenue Commissioners to people outside the State; and the number of residential properties covered by these letters in respect of the local property tax; and if he will make a statement on the matter. [18114/13]
View answerSeán Fleming
Question:72. Deputy Sean Fleming asked the Minister for Finance the mechanisms in place to ensure that persons who are non-resident and or non-domiciled here for tax purposes pay the local property tax on residential property; and if he will make a statement on the matter. [18115/13]
View answerWritten answers
I propose to take Questions Nos. 67, 71 and 72 together.
I am informed by the Revenue Commissioners that a key aspect of the work they have undertaken in connection with Local Property Tax (LPT) has been the development of a register of residential properties in the State, which is the cornerstone of the new tax. The Register was developed using data drawn from a range of sources including Revenue’s own databases (which includes details from the Non-Principal Private Residence Charge database), the Local Government Management Agency database, and data from utility companies. This register has been used to issue correspondence to property owners and, by 16 April 2013, Revenue had issued 1.29 million letters to owners of 1.6 million properties.
It is expected that letters will issue this week to owners of approximately 35,000 properties. Given the scale of the task involved and the multiple sources that have been used to create the register, I understand the Revenue Commissioners are continuing to update it with new cases as they come to light and letters will continue to issue to newly identified property owners as a result. This may include a certain number of non-resident liable persons. I am also informed by the Revenue Commissioners that, according to the LPT Register, there are about 154,000 owners of multiple properties who are liable to pay the tax on approximately 470,000 properties.
The Commissioners can confirm that 4,381 letters have issued to individuals who are described on Revenue’s records as non-residents. According to the LPT Register, these individuals own 7,736 residential properties in the State. Revenue also advises that included in the 1.29 million letters that have issued to date are letters to two further categories of property owner that are potentially non-resident. A number of letters have issued to foreign addresses and Revenue is aware that letters will have issued to an Irish address where the person who owns the property is residing outside the State, because Revenue would not be aware in the normal course of a change of residence. It is not possible to provide any definitive numbers in respect of these categories of property owners until LPT Returns have been filed and the necessary analysis has been completed. The Commissioners advise that a number of non-residents have already engaged with the process and fully met their obligations.
The Commissioners also advise that where an owner is not on Revenue’s register a Return will not issue. However, such owners are still obliged to complete and file an LPT Return by the relevant deadline – 7 May for paper filers and 28 May for electronic filers. As part of its media campaign this week Revenue is advising property owners that, if they have not yet received an LPT Return from Revenue, they should request a paper form by contacting Revenue’s LPT Helpline or accessing the on-line system on Revenue’s website to file their LPT Return on-line. I am also advised that even where a property owner has not received a Property ID and PIN code from Revenue, they will still be able to file their Return online.
Every effort is being made to ensure that non-resident owners of residential properties in the State are aware of their obligations with regard to LPT. Revenue is engaging in a public communications campaign and a substantial amount of information on the tax has been published on the Revenue website. This information is being updated regularly and is accessible from abroad. Non-resident owners have full access to the online filing system for LPT and can contact the LPT Helpline through a dedicated line for callers outside the State at +353 1 7023049, if they have any queries or require assistance with filing their Returns on-line. I understand that, to date, 6,131 phone calls have come through this telephone number.
As part of the general issue of LPT Returns, property owners also receive a Notice of Estimate of LPT. This is the amount of LPT that will be pursued by Revenue, in accordance with the LPT legislation, if the resident or non-resident owner does not complete and submit their LPT Return.
The compliance strategies for non-resident property owners will vary depending on whether the property is let and whether there is a letting agent, etc. The legislation provides that Revenue may require anybody acting as an agent in relation to a letting or who receives rent provide details on request in relation to the property. A tenant may also be required to give the relevant details. I am further advised that the normal compliance and debt recovery provisions apply to LPT as apply to the collection and recovery of other taxes and duties under the care and management of the Revenue Commissioners. This includes the attachment of rent payable. An additional mechanism that Revenue can invoke in the case of residents of countries with which Ireland has a double taxation convention is the exchange of information provisions which would assist with profiling, and corresponding with, the individual involved.
Finally, as the Deputy will be aware, any unpaid LPT will attach to the residential property, and the resident or non-resident owner will not be able to sell or transfer the property without paying the LPT, along with interest and penalties due. I am advised by Revenue that their initial focus is on the completion of the Register, that it is clear that there is already a significant level of engagement with the tax, and that it is too early in the process to be specific on the strategies they will deploy to address compliance issues on the part of non-residents.
Tax Reliefs Availability
Questions (68)
Seamus Healy
Question:68. Deputy Seamus Healy asked the Minister for Finance if he will amend the Finance Act to ensure that section 469 of the Taxes Consolidation Act(1997)(1) under the health expenses reads (f) physiotherapy; and if he will make a statement on the matter. [18055/13]
View answerWritten answers
Income tax relief in respect of health expenses is allowable in accordance with section 469 of the Taxes Consolidation Act 1997. This legislation provides for tax relief for health expenses incurred in the provision of health care. Health care is defined for the purposes of that legislation as the prevention, diagnosis, alleviation or treatment of an ailment, injury, infirmity, defect or disability and includes care received by a woman in respect of pregnancy. Health care does not include routine ophthalmic or dental treatment. The section provides that tax relief must be either for the costs of the services of a practitioner, defined as a person registered on the register established under the Medical Practitioners Act 2007, or diagnostic procedures carried out on the advice of a practitioner, which includes “physiotherapy or similar treatment prescribed by a practitioner”. Eligibility for tax relief is limited to expenses relating to treatment considered necessary and appropriate by a qualified practitioner.
Section 469 of the Taxes Consolidation Act 1997 consolidated all previous legislation pertaining to relief for health expenses, in particular section 12 of Finance Act 1967 which introduced the relief in the first instance. This section also required that physiotherapy or similar treatment be prescribed by a practitioner before qualifying for relief. This requirement has, therefore, been part of the qualifying criteria since the introduction of relief for health expenses and I am advised by the Revenue Commissioners that guidance and instructions to staff have remained unchanged in this regard. For 2010 the cost of tax relief for health expenses was €127 million and was availed of by 368,000 individuals who had sufficient income to benefit from a claim. There is no specific breakdown in these figures of the costs related to physiotherapy.
If self-referral for physiotherapy were allowed, an estimate of the additional cost would be unquantifiable, but, undoubtedly, it would increase the overall cost of health expenses relief to the Exchequer. While the Government supports measures to lower the cost of medical treatment which should in turn lower the costs of health care provision by the State, an extension of the relief along the lines proposed would inevitably lead to calls for other treatments to similarly qualify for relief, which would greatly increase the overall cost of the scheme. I would point out that this issue was raised during the debates in the Seanad on Finance Bill 2013 during which I agreed to re-examine the matter during the course of this year.
Property Taxation Collection
Questions (69)
Seán Fleming
Question:69. Deputy Sean Fleming asked the Minister for Finance the person who determines the market value of Áras an Uachtaráin for the local property tax; and if he will make a statement on the matter. [18112/13]
View answerWritten answers
The Finance (Local Property Tax) Act 2012 (as amended) provides that a liability for Local Property Tax (LPT) will arise where a person owns a residential property on the liability date which will be 1 May 2013 for the year 2013. As LPT is a self-assessed tax it will be a matter for the property owner to calculate the tax due based on his or her assessment of the market value of the property. All residential properties owned by the State including those owned by the Office of Public Works (OPW) are liable for LPT. In this regard the OPW is liable to LPT in respect of properties under its control, including Áras an Uachtaráin.
I am advised by the Office of Public Works (OPW) that it is engaging with the Revenue Commissioners to assess the market value of all those buildings in the State's property portfolio which are or could be considered to be residences for the purposes of the LPT, including Áras an Uachtaráin. The Valuation Service of the OPW will be responsible for assigning a market value to this and all the other properties under its control judged liable for the tax.