Written Answers Nos. 65-73
65. Deputy Michael McGrath asked the Minister for Finance if he will arrange for the Revenue Commissioners records to be amended in relation to local property tax liability for 2013 in respect of persons (details supplied) in County Cork. [52359/13]
View answerI am advised by Revenue that Section 156 of the Finance (Local Property Tax) Act 2012 (as amended) provides that, where arrears of Household Charge in respect of 2012 were outstanding at 1 July 2012, the amount was increased to €200 and reclassified as arrears of Local Property Tax (LPT). On the specific case to which the Deputy refers, Revenue has confirmed that the LPT Returns and payments due for 2013 and 2014 have been filed and are correctly reflected on the LPT Register. However, Revenue has not received confirmation of payment of the Household Charge in respect of the property in question from the Local Government Management Agency (LGMA). Revenue informs me that while the process of importing Household Charge data from the LGMA computer system to Revenue's IT systems is well advanced there are still a number of records to be cross referenced and linked.
Revenue has informed me that it will make direct contact with the persons in question to assure them that they are fully compliant with their LPT obligations in respect of 2013 and 2014 and secondly to confirm the status of their Household Charge liabilities in respect of 2012.
66. Deputy Terence Flanagan asked the Minister for Finance the number of properties the National Asset Management Agency has offered to homeless charities; if he will set out the status of these properties and the reason some were refused; and if he will make a statement on the matter. [52362/13]
View answerNAMA has made 4,369 properties available, through its debtors and receivers, for social housing. Under a formal process agreed with the Minister for the Environment, Community and Local Government and the Minister for Housing and Planning, NAMA has provided a list of these houses and apartments to the Housing Agency, which, in turn, has engaged with local authorities to ascertain demand. Where demand has been confirmed, the Housing Agency invites expressions of interest from the relevant local authority and approved housing bodies, including homeless charities, for the purchase or lease of the properties. Once demand is confirmed and the contract for purchase or lease is entered into through this process, NAMA makes the properties available as soon as is possible.
67. Deputy Terence Flanagan asked the Minister for Finance his plans to reduce the top-ups paid to senior bank executives who have breached Government pay policy; and if he will make a statement on the matter. [52366/13]
View answerThe perception that senior bank executives are receiving top-ups in pay is an erroneous one. The payment of performance bonuses to employees at the covered institutions is prohibited except in certain circumstances such as on foot of a court order. The Review of Remuneration Practices and Frameworks at the covered institutions for the period 2008 to 2012 revealed that no pay increases have been provided to the generality of the employees and bonuses are no longer payable at the covered institutions. The Review can be found at http://www.finance.gov.ie/documents/publications/reports/2013/mercerreportfin.pdf
In 2009, the then Government decided to impose a base salary cap of €500,000. Present Government policy on remuneration - which goes beyond previous policy - dictates that no employee at any of the covered institutions (unless specifically approved) may receive annual remuneration (excluding pension contributions) of more than €500,000.
It should also be noted, that employees of the banks are not public sector employees, therefore, the Government pay policy does not affect their individual employment contracts.
68. Deputy Terence Flanagan asked the Minister for Finance his views that any restrictions applied to credit unions by the Central Bank to lend will lead directly to the increase in moneylenders; and if he will make a statement on the matter. [52368/13]
View answerThe statutory role of the Registrar of Credit Unions is the protection of members’ savings and the maintenance of financial stability and well-being of credit unions generally. All credit unions are required to ensure that they apply scrutiny to all new loan applications and that all applications are fully assessed to determine the borrower’s ability to repay. Credit unions are also required to ensure that they put in place clear limits on the total funds available for granting loans, bearing in mind the need to ensure that they maintain adequate levels of liquidity to support their operations.
In order to protect the members’ savings, it has been necessary to put lending restrictions in place in credit unions where there are regulatory concerns about the operation of individual credit unions and the resultant risk to members’ savings. The number of lending restrictions in place is a reflection of the Registrar’s concerns about lending practices in the sector.
The individual credit union lending restrictions currently in place are reviewed on a regular basis to determine whether they are still set at appropriate levels.
All moneylenders are required to be licensed by the Central Bank, and this category of financial service provider includes:
- home collection firms where repayments are collected at the customer’s home;
- remote firms where payment is made directly to the firm e.g. by direct debit;
- retail firms involved in the provision of goods on credit with repayments being made by a variety of methods e.g. cash, direct debit; and
- other firms who operate on the basis of running accounts e.g. catalogue companies.
The Central Bank recently published a Report on the Licensed Moneylending Industry which is available on its website. The research was undertaken to inform the regulatory approach to the licensed moneylending industry in Ireland and to see how the firms are treating their customers. The Report states that there are 43 licensed moneylenders in operation and outstanding loan amounts are in the region of €200 million; in contrast, outstanding loan amounts in the credit union sector stand at some €4.6bn.
A key finding of the report is that the overriding catalyst for borrowing from moneylenders is convenience and ease of availability and that there is a willingness by these customers to pay a premium for what they perceive to be convenience and access to credit. When asked why they used moneylenders, only 5% of customers responded that it was because they had been refused credit elsewhere, notwithstanding the fact that 77% of respondents report being refused credit elsewhere in the past. The existence of lending restrictions at credit unions does not emerge as a factor in customers using licensed moneylenders.
Where the Central Bank becomes aware of a case of suspected illegal moneylending, it will refer the matter to An Garda Síochána.
69. Deputy Terence Flanagan asked the Minister for Finance if he will provide in tabular form his Department's prediction for the national debt figures, interest payments, economic growth figures and unemployment rates and number for 2013, 2014, 2015 and 2016; and if he will make a statement on the matter. [52371/13]
View answerThe most recent forecasts were made as part of Budget 2014 and are shown in the following table.
Budget 2014 forecasts
|
- |
2013 |
2014 |
2015 |
2016 |
|
National Debt (€ billion) |
173.8 |
183.6 |
189.8 |
193.0 |
|
Interest on National Debt (€ billion) |
7.2 |
8.2 |
8.8 |
9.1 |
|
% change in Real GDP |
0.2 |
2.0 |
2.3 |
2.8 |
|
Unemployment rate % |
13.5 |
12.4 |
11.8 |
11.4 |
Source: Department of Finance & NTMA
The Deputy should bear in mind the distinction between National Debt and General Government Debt (GGD). National Debt is the net debt incurred by the Exchequer after taking account of cash balances and other financial assets and is reflected in the table above. GGD on the other hand is a measure of the total gross consolidated debt of the State and is the measure used for comparative purposes across the European Union. It is reported on a gross basis and, unlike National Debt, it does not net off cash balances and other financial assets.
70. Deputy Róisín Shortall asked the Minister for Finance if he will provide a response to the issues raised in correspondence (details supplied) regarding the local property tax. [52410/13]
View answerIn accordance with the Finance (Local Property Tax) Act 2012 (as amended), liability for Local Property Tax (LPT) will arise where a person owns a residential property on the liability date, which was 1 May 2013 for 2013 and for subsequent years, 1 November in the preceding year. For the year 2014, the liability date is 1 November 2013 and the tax is payable on or before 1 January 2014. Where a liable person sells their residential property between 2 November 2013 and 31 December 2013, provided that they owned the property on 1 November 2013, they will be liable to pay LPT on that property for 2014.
These dates have been in the public domain since December 2012 when the legislation was passed and 1 November liability date has been the subject of several occasions previous Parliamentary Questions, including my reply to Question No. 110 on 27 March this year. I also informed the House in my replies to Questions Nos. 221 (49518/13) and 223 (49556/13) on 19 November 2013 that having a liability date before the year commences is preferable as there is certainty about who the liable person is for the coming year, that person has a reasonable amount of time to make the necessary provisions and they have access to the widest possible range of options for paying the tax. In particular, the liable person can put the required arrangements in place to ensure that phased payments by way of direct debit or deduction at source from employment, occupational pension or from certain Government payments would commence from January 2014 and would spread payment of the full LPT liability evenly over the course of 2014.
For a tax such as LPT to function properly, legislation must specify a liability date for the tax to have application for a particular year. Whatever date is prescribed, the question of liability when there is a change of ownership has to be managed, and I would expect that the LPT liability involved is likely to be factored in during negotiations between the parties on the sale price and the closing date of a particular contract.
As there are a number of LPT issues to be considered when buying or selling a house, I am advised that detailed guidance on LPT issues arising in the context of the sale or transfer of a residential property was prepared by the Revenue Commissioners in consultation with the Law Society and is available since last August on the Revenue website at http://www.revenue.ie/en/tax/lpt/sale-transfer-property.html and on the Law Society’s website.
The liability date for 2014 of 1 November 2013 is settled, has been approved by the Oireachtas in passing the LPT legislation and I have no plans to change the law in question. Since the 2014 liability date of 1 November 2013 is provided for in the legislation, any owner selling their residential property between 2 November and 31 December 2013 cannot therefore appeal their liability for LPT on the property for 2014.
71. Deputy Róisín Shortall asked the Minister for Finance the reason a person (details supplied) in Dublin 9 received a local property tax letter addressed to their deceased spouse for a property their spouse did not own; and if he will make a statement on the matter. [52413/13]
View answerI am advised by Revenue that a key aspect of the work it has undertaken in connection with the administration of Local Property Tax (LPT) has been the development of a register of residential properties in the State. The process involved consolidating data for approximately two million records, some of which were difficult to match because of variations in addresses and names and reference numbers held by different agencies. In a small number of cases, individuals and properties were referenced and matched incorrectly. In regard to the specific case mentioned by the Deputy, the correct owner of the ‘second’ property paid the 2013 LPT liability but did so without filing the LPT 1 Return.
Unfortunately the PPS number quoted by the property owner when making the payment was similar to the number previously used by the deceased spouse of the person in question. For that reason Revenue inadvertently associated the payment and property with the deceased spouse.
Revenue has assured me that it has now corrected the details in respect of both properties on the Property Register. Revenue would also like to apologise to the person in question for any stress or upset caused.
72. Deputy Róisín Shortall asked the Minister for Finance the reason payment for a person's 2013 local property tax liability (details supplied) in Dublin 11 was only taken for this person's primary home; if the Revenue Commissioners will arrange to have the remainder of this person's 2013 liability withdrawn; if this person will now owe any penalty fees; and if he will make a statement on the matter. [52414/13]
View answerI am advised by Revenue that owners of more than one property are obliged to meet their Local Property Tax (LPT) filing and payment obligations via Revenue’s online system. Revenue has also advised me that all multiple property owners were issued with a single LPT 1 Return for 2013 in respect of all properties linked to them. Access to the various linked properties ‘covered’ by the Return is possible through the Property ID and PIN numbers which were provided as part of the LPT Return. In the case raised by the Deputy, Revenue has informed me that the person filed his 2013 return in respect of one property and paid the liability on that property via Single Debit Authority. The payment was subsequently deducted from his bank account by Revenue on 1 July 2013 in line with his instruction.
However, the person neglected to either file or pay in respect of his second property at that time, but subsequently met his obligations in November 2013 on foot of a reminder letter from Revenue. The person has also met his obligations for 2014 in respect of both properties and is fully compliant at this point.
Revenue has confirmed to me that because the person is now fully compliant with his LPT obligations in respect of both properties for 2013 and 2014 it does not intend to levy any penalties against him in respect of the late filing and payment of the second property for 2013.
73. Deputy Michael McGrath asked the Minister for Finance if the Revenue Commissioners have changed the basis on which they pay mortgage interest relief from one paid on interest payable by the customer to one based on interest paid; and if he will make a statement on the matter. [52420/13]
View answerThe Statutory position in relation to mortgage interest relief entitlement is that individuals can avail of the relief in respect of qualifying interest paid in a tax year, as provided for in Section 244 of the Taxes Consolidation Act 1997. Since the introduction of Tax Relief at Source (TRS) in respect of mortgage interest payments in 2002, ‘interest charged’ and ‘interest paid’ figures generally reconciled in the vast majority of cases over any 12 month period. In such circumstances, Revenue agreed with lenders to allow the relief on the basis of both ‘interest charged’ and ‘interest paid’ for ease of administration. A key part of the agreement required the lenders to inform Revenue of the exceptional cases where cumulative arrears had built up over an 18 month period. All such cases were reviewed on a case by case basis and the relief was withdrawn where appropriate. The 18 month ‘review period’ was reduced to 6 months in September 2012 in response to the increasing numbers of mortgage arrears cases.
As the number of arrears cases being reported by the lenders continued to increase, Revenue further reviewed the practice of allowing the relief on both ‘interest charged’ and ‘interest paid’ and on the basis of the review, has instructed all lenders to only allow TRS in line with the requirements of the legislation with effect from 1 January 2014, i.e. interest paid by the borrower.
The new arrangements will have no impact for borrowers who pay the correct mortgage amount on time, in accordance with the terms of their loan. In instances where borrowers do not make payments or pay less than the amount of interest due, then the TRS amount will be reduced to reflect the actual amount paid.
