Tuesday, 2 July 2013

Questions (184)

Finian McGrath

Question:

184. Deputy Finian McGrath asked the Minister for Finance if those who are on interest-only mortgages are exempt from local property tax; and if he will make a statement on the matter. [31595/13]

View answer

Written answers (Question to Finance)

The Government decided the LPT should apply to all owners of residential property with limited exemptions. Limiting the exemptions available allows the rate to be kept low for those liable persons who do not qualify for an exemption.

There is no specific exemption for property owners who have an interest only mortgage. However, such individuals may be eligible for a deferral of LPT should they meet the qualifying conditions. To qualify for a deferral, the residential property must be occupied as a sole or main residence. The gross annual income thresholds for a full deferral will be €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 annual 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, which may of particular relevance to owner-occupiers with an "interest only" mortgage. In such cases, the gross income thresholds may be increased by 80% of the gross mortgage interest payments. The deferral option in such qualifying cases will apply until the end of 2017, as long as the claimant continues to satisfy the qualifying criteria.