Dáil Éireann Debate, Wednesday - 16 July 2014
56. Deputy Thomas P. Broughan asked the Minister for Finance further to Parliamentary Question No. 72 of 10 July 2014, to outline his position on reducing the rate of interest charged on home owners who opt to defer the payment of the local property tax, particularly in circumstances where the home owners concerned have opted to defer the payment of LPT due to their being required to pay a substantial amount of mortgage repayments. [31812/14]
View answerIn considering how to provide for a deferral regime for those who were unable to make their Local Property Tax (LPT) payments, including those with substantial mortgage repayments, I was mindful of the recommendations contained in the report of the Thornhill Group. In their report, the Thornhill Group recommended that where taxpayers are entitled to, and have elected for, deferral of LPT, interest due on deferred payments should be at a lower rate to the rate charged on overdue LPT.
I am informed by the Revenue Commissioners that any deferred LPT carries an interest charge of 4% per annum. The 4% deferral interest rate is half the rate charged on overdue income tax, capital gains tax and LPT, which is currently set at 8% per annum. The Deputy may wish to note that the cost of deferring the annual LPT charge of €225 on a property valued in Band 2 (€100,001 - €150,000) would be €9 per year.
I believe that the imposition of interest is an appropriate additional charge for deferred payment of the tax, and the 4% rate of interest is fair and reasonable in the circumstances.
