Dáil Éireann Debate, Tuesday - 19 November 2013
163. Deputy Clare Daly asked the Minister for Finance if he will explain the source of the error with regard to the property tax and the fact that Revenue will have to refund many persons who were not first-time buyers; and if he will outline the full amount of the refund to be paid. [48827/13]
View answerI assume the Deputy is referring to the exemption in section 8 of the Finance (Local Property Tax) Act 2012 (as amended). It was originally intended that this exemption would only apply to first-time buyers, which is clear from the heading to the section: "Exemption for first-time buyers". The Explanatory Memorandum to the Bill (prior to enactment) also states that the exemption applies to first-time buyers. The Deputy may recall that mortgage interest relief was phased out on mortgages taken out after 31 December 2012 and this measure was a transitional provision to help first-time buyers in the first year after the abolition of mortgage interest relief. However, as written, the exemption benefits any buyer, not just a first-time buyer. The result is that a person who purchases a second hand house and occupies it as a sole or main residence is entitled to the exemption regardless of whether s/he is a first-time buyer.
The Revenue Commissioners have advised me that this exemption applies to a clearly defined group of property owners, who are being identified using Stamp Duty records. These fall into two broad groups; those who purchased a residential property between 1 January 2013 and 1 May 2013 and paid the LPT for 2013, and those who purchased a property after 1 May 2013.
There is a significant amount of work involved in identifying individuals who bought in 2013 and who are entitled to the exemption. When this work is completed Revenue will write to these individuals and will provide advice on what action should be taken where the individual confirms that s/he qualifies for the exemption and wishes to claim it, so that s/he may receive a refund of any LPT already paid for 2013 or 2014. In relation to the total amount of tax that will be refunded to these individuals, the Commissioners have advised that this figure will only be available when they are satisfied that they have identified all individuals who have paid LPT but are entitled to the exemption.
I am also advised that information on this matter was first published on the Revenue website in July 2013. Since then further information was updated on the Revenue website on 8 November 2013 confirming that the exemption in question was not restricted to first-time buyers who are owner occupiers, and that any person purchasing a property in 2013 will qualify for this exemption once they occupy the property as their sole or main residence.
In addition, Revenue recently issued clarification on this matter to the media, which was extensively reported. On the basis that purchasers almost inevitably avail of the services of a solicitor, Revenue has also contacted the Law Society as well as auctioneering and estate agent representatives to advise them of the issue and to ask them to publicise it amongst their membership.
