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Black Economy

Dáil Éireann Debate, Tuesday - 27 May 2014

Tuesday, 27 May 2014

Questions (159)

Seán Fleming

Question:

159. Deputy Sean Fleming asked the Minister for Finance if he will consider extending the principles in the home renovation incentive in Finance Act (No. 2) 2013, an aim of the incentive which is to support tax compliant building contractors by introducing a similar type of measure for persons who wish to claim mortgage interest relief from the Revenue Commissioners as a way of ensuring that only persons who are tax compliant in the construction industry will have a clear advantage over those operating in the shadow economy in view of the fact that he has stated in Parliamentary Question No. 59 of 15 May 2014 that he would not ask the banks to get involved in this process but the Revenue Commissioners could have a role in relation to mortgage interest relief; and if he will make a statement on the matter. [23209/14]

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Written answers

As I stated in my previous reply to the Deputy, I introduced the Home Renovation Incentive in Finance Act (No 2) 2013. The aim of the Incentive is to support tax compliant building contractors by moving activity out of the shadow economy into the legitimate economy. In order to qualify for the tax credit, the works must be carried out by legitimate contractors on a homeowner's main residence. The homeowner must also be property tax compliant.

In order to qualify for mortgage interest relief (MIR), a loan must have been drawn down and used in the purchase, repair or development of an individual's principal private residence on or before 31 December 2012. On this basis any funds drawn down on a date later than 31 December 2012 do not qualify for the relief. Existing claimants of mortgage interest relief, will however retain the relief until the 2017 tax year at which stage it is scheduled to expire. As no new loans can qualify for mortgage interest relief, it would not be possible to tie the relief to tax compliant building contractors in the manner suggested by the Deputy.

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