Written Answers Nos. 35-41
35. Deputy Heather Humphreys asked the Minister for Finance the position regarding property tax liability for 2014 in respect of a case (details supplied); his plans to address this anomaly; and if he will make a statement on the matter. [4380/14]
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. I would draw the Deputies attention to the fact that the 1 November liability date has been raised and responded to on several occasions in the House previously and, as far back as 27 March last year, in a reply to Question No. 110, I specifically addressed the fact that 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. Furthermore, the LPT liability crystallises on the sale of a residential property and must be paid in full either in advance of the sale or must be deducted from the proceeds of the sale. This includes any LPT that has been deferred by the liable person. This is in accordance with section 126 of the Act.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 expect the LPT liability is likely to be factored in during negotiations between the parties on the sale price and the closing date of a particular contract.
In relation to the assertion that there is an anomaly created when a property is sold between 2 November 2013 and 31 December 2013, an individual selling a property will often be purchasing another property at around the same time. While a vendor who owns a property on 1 November 2013 is liable for the 2014 LPT on that property, if s/he does not purchase another property before 1 November 2013 s/he will not be liable for the 2014 LPT on that "replacement" property - whoever is the owner as of 1 November 2013 will be liable.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 in the LPT legislation and I have no plans to change it.
36. Deputy Ciarán Lynch asked the Minister for Finance if he will consider the merits of the proposal (details supplied) regarding single parent tax credit; and if he will make a statement on the matter. [4397/14]
View answerAs the Deputy is aware, the One-Parent Family Tax Credit (OPFTC) is being replaced with a new Single Person Child Carer Tax Credit from 1 January 2014. The restructured credit will be of the same value i.e. €1,650 per annum as the one-parent family tax credit and it will also carry the same entitlement to the additional €4,000 extended standard rate band, which increases it to €36,800 per annum, before liability to the higher rate of income tax arises. However, the credit will be more targeted, in that it will in the first instance, only be available to the principal carer of the child. Given the difficult fiscal environment, it is essential to review all tax reliefs, credits and incentives in order to ensure that they are properly targeted and if necessary re-focused in order that they can achieve the socio-economic objectives that are set for them. A system that allows multiple claims in respect of the same child or children is unsustainable.
The new credit is designed to be an activation measure, which was the original intention behind the OPFTC. It is designed to be an in-work benefit to support the primary carer to take up, or remain in, employment. It should not be considered as a supplementary source of income, on which the financial support of a parent depends.
The Commission on Taxation acknowledged that the One-Parent Family Tax Credit played a role in supporting and incentivising the labour market participation of single and widowed parents. However, in its recommendations it concluded that the credit should be retained but that it should be allocated to the principal carer only. The restructuring of the credit will achieve such an outcome.
As regards the potential of this change to interfere with the level of maintenance payments, if such reasoning were to be applied, then any general tax increase, as a result of an adjustment in tax credits, rates or bands could lead to similar situations. Ultimately, maintenance payments are a matter for parents and if necessary, the courts to decide. It is not possible, and indeed would not be appropriate, for the tax code to take account of every possible variable. However, as a result of the amendment which I brought at Committee Stage in the Dáil, a primary carer can relinquish the credit such that a non-primary carer can claim it. This could be done on alternate years, should the relevant individuals agree. In such manner, both carers would have the benefit of the credit and additional standard rate band but only on alternate years. This goes some way towards achieving the result that your proposal advocates.
37. Deputy Niall Collins asked the Minister for Finance the action he will take where certain banks are refusing to engage with persons in respect of mortgage arrears and threatening repossessions; if his attention has been drawn to the deep concern being created in this regard; and if he will make a statement on the matter. [4410/14]
View answerThe Central Bank's Code of Conduct on Mortgage Arrears (CCMA) sets out requirements for mortgage lenders dealing with borrowers facing or already in arrears on a mortgage which is secured on a primary home. The CCMA provides a strong consumer protection framework to ensure that borrowers struggling to keep up mortgage repayments are treated in a fair and transparent manner by their lender, and that long term resolution is sought by lenders with each of their borrowers.
The CCMA is a statutory Code issued under Section 117 of the Central Bank Act 1989 and lenders are required to comply with the CCMA as a matter of law. The CCMA sets out the framework that lenders must use when dealing with borrowers in mortgage arrears or in pre-arrears. This framework is known as the Mortgage Arrears Resolution Process (MARP) which sets set out the steps which lenders must follow:
Step 1: Communicate with borrower; Step 2: Gather financial information; Step 3: Assess the borrower's circumstances; and Step 4: Propose a resolution.
The CCMA provides an integrated and cohesive package of consumer protection measures and it seeks to deliver on the following principles, to:
- ensure appropriate resolution of each borrower's arrears situation;
- ensure that lenders deal with borrowers in a fair and transparent manner;
- support and facilitate meaningful engagement between lenders and borrowers; and
- ensure borrower awareness of the benefits of co-operating with their lender, and the consequences of not co-operating.
The Central Bank has advised that, where a borrower believes that their lender has not complied with or in any way disregarded the Code of Conduct on Mortgage Arrears, he/she may make a complaint to their lender. The lender must seek to resolve the borrower's complaint in line with the complaints handling process set out in provisions 10.7 to 10.12 of the Central Bank's Consumer Protection Code.
Each lender must also have an appeals process in place to enable a borrower to appeal in relation to a decision of the lender, including:
1. Where an alternative repayment arrangement is offered by a lender and the borrower is not willing to enter into the alternative repayment arrangement;
2. Where a lender declines to offer an alternative repayment arrangement to a borrower; and
3. Where a lender classifies a borrower as not co-operating.
For this purpose, each lender must establish an Appeals Board to consider and determine any such appeals submitted by borrowers. If the borrower remains dissatisfied following the outcome from the complaints or appeals process, he/she may then refer the matter to the Financial Services Ombudsman who deals independently with unresolved complaints from consumers about their individual dealings with all financial service providers.
Likewise borrowers should also communicate and engage with their lender regarding a mortgage in difficulty as early and effective engagement between borrowers and lenders is key to resolving cases of mortgage difficulty. Where there is effective and meaningful engagement, the data shows that an increasing number of durable long term mortgage restructures is being put in place.
38. Deputy Jack Wall asked the Minister for Finance if a person (details supplied) in County Kildare should be exempt from paying universal social charge for 2012 and 2013; and if he will make a statement on the matter. [4434/14]
View answerI am advised by the Revenue Commissioners that the person concerned is liable to pay the universal social charge for 2012. A PAYE Balancing Statement (P21) issued to the person concerned on 2 April 2013 detailing the charge for 2012. In Budget 2013, following a review of the USC carried out by my Department, the income threshold for the application of the universal social charge was increased from €77 per week for 2012 to €193 per week and therefore the person concerned is not liable for the charge for 2013. The Revenue Commissioners will write to the person concerned seeking the information necessary to issue a PAYE Balancing Statement (P21) for 2013.
39. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of a new building for the Central Bank of Ireland; and the alternatives that were examined such as investigating the use of existing Office of Public Works sites. [4453/14]
View answerUnder section 6B of the Central Bank Act 1942, the Central Bank Commission is responsible for administering the provision of accommodation and office and other equipment with a view to enabling the Central Bank to perform and exercise its functions and powers. Accordingly I have no function in the matter of accommodation arrangements at the Central Bank.
I have been informed by the Central Bank that the cost of the purchase of the site at North Wall Quay was €8.1m, including VAT. Other expenditure on the building is commercially sensitive at this time under public procurement rules.
I have been further informed by the Central Bank that it evaluated a range of suitable options including Office of Public Works owned premises, alternative commercial premises and retention of existing premises. The Central Bank is satisfied that development of the North Wall Quay site is the most cost effective solution for its requirements.
40. Deputy Pearse Doherty asked the Minister for Finance the total cost of the Central Bank of Ireland for the outsourcing of its IT system, including the cost incurred due to the HP data centre. [4455/14]
View answerThe Central Bank entered into a contract with Hewlett Packard Ireland Ltd. to provide the physical data centre environment to host the Central Bank's IT systems and to manage the technical infrastructure aspects of these systems. Hewlett Packard Ireland Ltd. will also provide hosting facilities at a backup data centre for the purposes of business continuity. Both of these data centres are located in Dublin.
The Central Bank followed robust public procurement tendering procedures before awarding this contract. The Central Bank selected Hewlett Packard Ireland Ltd. as a result of an open tendering process in compliance with strict guidelines laid down by the EU public procurement process. I am informed by the Central Bank that the cost of the tendering process for this service is estimated at €150,000 including the cost of legal advice.
I am informed by the Central Bank that a number of alternatives were investigated thoroughly and compared across a number of criteria before the contract was approved by the Central Bank Commission. The final costs of the contract that were agreed with the provider are commercially sensitive and are not available for release. However, I am informed by the Central Bank that the approach taken was considerably advantageous on cost when compared to the alternatives examined.
41. Deputy Terence Flanagan asked the Minister for Finance the reason it takes five working days to cash a cheque; if this time can be reduced; and if he will make a statement on the matter. [4475/14]
View answerI have been informed by the Central Bank that, generally speaking, the clearing cycle for a cheque in Ireland should be no longer than three business days, with the bar on returning a cheque unpaid being set at five business days. However, it should be noted that this clearing cycle can be shorter in some circumstances in particular where the accounts of the payer and the payee are both held with the same branch of the same bank. As to the related matter of when a bank will permit a customer to draw against a cheque lodged to his or her account, this is a matter for decision by each bank based on its own risk management arrangements and would be outlined in the relevant terms and conditions.
