Dáil Éireann Debate, Thursday - 9 May 2013
53. Deputy Noel Grealish asked the Minister for Finance the way deferral of local property tax and the subsequent 4% charge will be of any benefit to those qualifying persons already in debt distress; and if he will make a statement on the matter. [21930/13]
View answerThe deferral arrangements in the Finance (Local Property Tax) Act 2012, as amended, are focused on particular categories of householders and enable cases where there is an inability to pay the Local Property Tax (LPT) to be addressed. To qualify for a deferral, the residential property must be occupied as a sole or main residence. The gross income thresholds for a full deferral are €15,000 for a single person and €25,000 for a couple, whether married persons, civil partners or qualified cohabitants. A person may claim a deferral if their gross income will not, “as can reasonably be foreseen at the liability date” exceed these thresholds in that year.
A deferral of up to 50% of the LPT liability will be possible where the gross income of the liable person does not exceed €25,000 for a single person or €35,000 for married persons/civil partners/cohabitants.
The full and partial deferral thresholds may be increased in the case of properties occupied as a sole or main residence and subject to a mortgage. In such cases, the gross income thresholds may be increased by 80% of the mortgage interest payments. The deferral option in such qualifying cases will apply until the end of 2017.
Additional reliefs introduced 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 both 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.
Interest of c. 4% per annum is charged on deferred amounts. This is half the interest rate charged in cases of non-compliance.
Deferrals allow tax not paid in a year to be rolled forward to be paid at a later date. Elections for deferrals are voluntary, subject to eligibility. Where properties change hands through gifts or inheritances, the charge need not be paid and the deferral option may continue and accumulate, provided the new owners meet the eligibility requirements for deferrals provided for in the legislation.
Taxpayers who had deferred payment, but who are no longer eligible for deferrals due to improved financial circumstances, have the option of leaving the original deferrals in place in respect of previous tax liabilities, or of paying them off either in single payments or gradually.
Any amount deferred will be a relatively small part of the overall value of the property, even where the deferral lasts for a number of years or in cases where the higher rate of 0.25% applies to a portion of the value.
