Budget Submissions

Questions (96)

Michael Healy-Rae

Question:

96. Deputy Michael Healy-Rae asked the Minister for Finance further to the SIMI proposal for a swappage scheme, if he will do his best to help our motor industry and the employment that it creates by putting in place a swappage scheme, which would be a major boost if implemented; and if he will make a statement on the matter. [41492/13]

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Written answers (Question to Finance)

My Department has received a pre-Budget submission from SIMI which includes, among other things a proposal for a swappage scheme. All such proposals will be considered in the context of the forthcoming Budget.

Financial Services Regulation

Questions (97)

Damien English

Question:

97. Deputy Damien English asked the Minister for Finance his plans to liaise with the Australian authorities in order to facilitate the acquisition of mortgages from financial institutions here by Irish citizens who are currently residing in Australia, and who are prevented from doing so under the Australian Corporation Act that was introduced in 2004; and if he will make a statement on the matter. [41242/13]

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Written answers (Question to Finance)

I have no responsibility for the issue referred to by the Deputy which is a matter of Australian law. The regulation of mortgage lending in Australia is a matter for the authorities there.

IBRC Mortgage Loan Book

Questions (98)

Michael McGrath

Question:

98. Deputy Michael McGrath asked the Minister for Finance the number of residential PDH and buy-to-let mortgages currently on the books of Irish Bank Resolution Corporation now in special liquidation; the plans the special liquidator has for the disposal of this loan portfolio; the implications such a sale will have for the individual mortgage customers, including for the protections they currently have under the code of conduct on mortgage arrears and the mortgage arrears targets programme; and if he will make a statement on the matter. [41254/13]

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Written answers (Question to Finance)

I am advised that the Special Liquidators of IBRC are maintaining contact with its mortgage holders and with the Central Bank (as part of its overall Mortgage Arrears Resolution Strategy (MARS) process) with a view to appropriately dealing with INBS mortgage holders in arrears on their mortgage. The Special Liquidators also confirm that the residential mortgage customers of IBRC (in Special Liquidation) continue to enjoy the protection of the Central Bank Code of Conduct on Mortgage Arrears and other protections in Irish consumer law. As of the end of May 2013 details of the IBRC Mortgage book are as follows:

-

PDH

-

BTL

-

Number of borrowers

11,057

83%

2,189

17%

Number of loans

14,756

85%

2,655

15%

The Central Bank’s Code of Conduct on Mortgage Arrears, which applies to all mortgage lending activities of all regulated entities, except Credit Unions, operating in the State, remains a key protection for those cooperating INBS/IBRC mortgage holders who are in difficulty in meeting their mortgage commitments. The Code provides, inter alia, that mortgage lenders should allow for a flexible approach in the handling of arrears and pre-arrears cases and that they should aim, as far as possible, at assisting the borrower who is in genuine difficulty having regard to the specific circumstances in individual cases. In particular, the Code provides that a lender’s Arrears Support Unit (ASU) must base its assessment of the borrower’s case on the full circumstances of the borrower including:

- the personal circumstances of the borrower;

- the overall indebtedness of the borrower;

- the information provided in the standard financial statement (SFS);

- the borrower’s current repayment capacity, and

- the borrower’s previous history.

In relation to the sale of the IBRC mortgage book, the Special Liquidators are taking professional advice on the appropriate method of disposing of loan assets and on the appropriate criteria for determining who should qualify to bid for loan assets. As part of this process the Special Liquidators have also written to all IBRC borrowers to update them on the sale of their IBRC Loans and Collateral Obligations and providing them with an opportunity to make written representations on the method of disposal of their loans and the criteria for determining who may bid for loan assets. The Special Liquidators are under instruction to ensure that the valuation of all IBRC assets is completed by 30 November 2013 and that the sale of all IBRC assets is agreed or completed by no later than 31 December 2013 or as soon as practicable thereafter.

I am advised that the contractual terms and conditions of customer mortgages and other borrowings will not change as a result of the appointment of the Special Liquidators or the ultimate sale of the obligations to a third party. The continued applicability of the Central Bank Code of Conduct on Mortgage Arrears and Mortgage Arrears Targets Programme will depend on the regulatory status of the ultimate acquirer of the portfolio which we will not know until the sales process has concluded. In the event that NAMA ultimately acquires this portfolio, the NAMA Board will determine its strategy at that stage and will, in doing so, be mindful of its legal obligations.

Tax Code

Questions (99)

Peadar Tóibín

Question:

99. Deputy Peadar Tóibín asked the Minister for Finance if he has or will put in place a tax break for families who have outgrown their current home or have had to move in order to work (details supplied); if there is legislation pending to provide assistance to those in negative equity who have no other means to exit their unsuitable domiciliary situation.; and if he will make a statement on the matter. [41310/13]

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Written answers (Question to Finance)

Finance Act 2009 introduced a cap of 75% on the amount of interest on loans used to purchase, improve or repair rented residential property, that can be deducted in computing rental profit for tax purposes. The restriction applies to interest accruing on or after 7 April 2009. It does not apply to loans in respect of rented commercial property. I am advised by the Revenue Commissioners that rental profit for tax purposes is the gross rental income less allowable expenses incurred in earning that rent. In computing the amount of rental profit, only those deductions that are specified in section 97(2) of the Taxes Consolidation Act 1997 are allowable as deductions against the gross rental income. The main deductible expenses are:

- any rent payable by the landlord in the case of a sub-lease;

- the cost to the landlord of any goods provided or services rendered to a tenant;

- the cost of maintenance, repairs, insurance and management of the property;

- the interest paid on borrowed money used to purchase, improve or repair the property (which, in the case of residential property, is restricted to 75% of the interest and is subject to compliance with PRTB registration requirements for all tenancies that existed in relation to the property in the relevant year); and

- payment of local authority rates.

In addition, wear and tear capital allowances are available in respect of the capital expenditure incurred on fixtures and fittings provided by a landlord for the purposes of furnishing rented residential accommodation. These allowances are granted at the rate of 12.5% per annum of the actual cost of the fixtures and fittings over a period of 8 years.

As regards any changes, the Deputy will be aware that it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.

The Central Bank has advised me that, while the levels of interest and take up have been low, a number of institutions have trade up/trade down products to assist their customers in such circumstances. The two most important criteria for assessing the suitability of a negative equity mortgage product in a particular case is its affordability and sustainability. The Central Bank advises that, when assessing a negative equity mortgage proposal, lenders should be cognisant of their obligations under the Consumer Protection Code regarding these matters as well as, if appropriate, the Code of Conduct on Mortgage Arrears. There are no proposals at this time for further legislative development in this area.

Disabled Drivers and Passengers Scheme

Questions (100)

Patrick O'Donovan

Question:

100. Deputy Patrick O'Donovan asked the Minister for Finance if he will consider the inclusion of the blind pension in the primary certificate criteria and assessment for disabled drivers' tax concessions; and if he will make a statement on the matter. [41328/13]

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Written answers (Question to Finance)

The Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme provides relief from VAT and Vehicle Registration Tax (up to a certain limit), and exemption from motor tax, on the purchase of an adapted car for transport of a person with specific severe and permanent physical disabilities. The disability criteria for these concessions are set out in the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations 1994. To get a Primary Medical Certificate, an applicant must be permanently and severely disabled within the terms of these Regulations. I have no plans to change the criteria at this stage.

Budget 2014

Questions (101)

Michael McGrath

Question:

101. Deputy Michael McGrath asked the Minister for Finance if he will provide in tabular form the carry over to Budget 2014 in respect of the local property tax, changes to the maximum allowable pension fund for tax relief purposes, carbon tax, capital gains tax, capital acquisitions tax, PRSI and other measures; and if he will make a statement on the matter. [41340/13]

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Written answers (Question to Finance)

Taxation provisions included in the Finance Act 2013 and the Finance (Local Property Tax) Act 2012 in relation to measures set out in Budget 2013 will result in an estimated carryover of around €300 million in 2014. There was also carryover from changes to PRSI in Budget 2013. Measures in relation to the maximum allowable pension fund at retirement to be introduced in 2014 were also announced in Budget 2013. A cross-Departmental Working Group of officials has been established to examine, among other things, the changes required to the existing arrangements governing the maximum allowable pension fund at retirement (the Standard Fund Threshold) and other potential alternative approaches for achieving the commitment. The Working Group has also sought views from various interested parties as part of the examination of options for delivering on the Budget commitment. This Working Group is also developing estimates of the likely yield from the changes. The result of this work will be incorporated into the budgetary arithmetic and will be included as part of the Budget 2014 measures. Until then the table sets out the remainder of the estimated carryover from Budget 2013.

Budget 2013 carryover

€m

Local property tax

250

Carbon tax

16

Capital gains tax

-1

Capital acquisitions tax

12

Income tax

35

USC

13

Employment and investment incentive

-25

Film relief (from 2016)

20

Auto-diesel excise relief for road hauliers

-35

3 year relief for start-up companies

-10

Real estate investment trusts (REITS)

-12

Increase in the VAT accounting threshold

20

Reduction in farmers flat rate addition

3

DIRT and life assurance exit taxes

14

PRSI

53

Total

353

Universal Social Charge Yield

Questions (102)

Michael McGrath

Question:

102. Deputy Michael McGrath asked the Minister for Finance the yield from increasing from 5% to 10% the universal social charge surcharge on income covered by property related reliefs; and if he will make a statement on the matter. [41341/13]

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Written answers (Question to Finance)

As the Deputy will be aware, Finance Act 2012 introduced a surcharge of 5% on the amount of income sheltered by property reliefs in a given year. The surcharge was effective from 1 January 2012 and applied to individuals with gross incomes exceeding EUR 100,000. It is tentatively estimated that the yield from increasing the surcharge from 5% to 10% could be of the order of EUR 7 million in a full year. As a result of decreasing claims of legacy property incentives over recent years the yield from the surcharge is estimated to be lower now than at the time the surcharge was announced in the 2012 Budget.

Excise Duties Yield

Questions (103, 104, 105, 106)

Michael McGrath

Question:

103. Deputy Michael McGrath asked the Minister for Finance the yield from increasing the excise duty on a packet of 20 cigarettes by 20 cent, 50 cent and €1 respectively; and if he will make a statement on the matter. [41342/13]

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Michael McGrath

Question:

104. Deputy Michael McGrath asked the Minister for Finance the yield from increasing the excise duty on a bottle of wine by 20 cent, 50 cent and €1 respectively; and if he will make a statement on the matter. [41343/13]

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Michael McGrath

Question:

105. Deputy Michael McGrath asked the Minister for Finance the yield from increasing the excise duty on beer and cider by 2 cent, 5 cent and 10 cent a pint respectively; and if he will make a statement on the matter. [41344/13]

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Michael McGrath

Question:

106. Deputy Michael McGrath asked the Minister for Finance the yield from increasing the excise duty on spirits by 2 cent, 5 cent and 10 cent per half glass measure, respectively; and if he will make a statement on the matter. [41345/13]

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Written answers (Question to Finance)

I propose to take Questions Nos. 103 to 106, inclusive, together.

I am informed by the Revenue Commissioners that, based on data currently available, the estimated full year yield from an increase in excise (VAT inclusive) on the products referred to are as follows:

-

20c

50c

€1

-

Full year

Full year

Full year

Wine

11.3

27.1

50.5

Tobacco

30.7

75.8

148.8

-

2c

5c

10c

-

Full year

Full year

Full year

Beer

13.8

34.4

68.5

Cider

1.9

4.7

9.4

Spirits

7.6

18.8

36.9