Written Answers Nos. 276-291
276. Deputy Pearse Doherty asked the Minister for Finance the way persons who have already had a mortgage approval or are in the process of buying a house, but may not conclude the sale until 2015, will be affected by the proposed new Central Bank of Ireland rules on mortgage lending; and if he will make a statement on the matter. [41086/14]
View answer315. Deputy Róisín Shortall asked the Minister for Finance his views on the Central Bank of Ireland's recent recommendations regarding conditions attaching to mortgage approval; if those who have already received mortgage approval will be affected; and if he will make a statement on the matter. [41579/14]
View answerI propose to take Questions Nos. 276 and 315 together.
As the Deputies are aware, the Central Bank has commenced a public consultation process on the proposed new macro prudential rules for residential mortgage lending and any person who wishes to make a submission on these proposals can do so by emailing realestate@centralbank.ie by December 8th next.
Regarding the position of consumers who have already been approved mortgages under existing rules but who will not draw down these loans until next year, the following is the position as outlined in the Central Bank consultation paper:
- If a regulated financial service provider has entered into a Mortgage Offer (Sanction in Principle) commitment before the date on which the Loan to Value (LTV)/ Loan to Income (LTI) limits come into effect, the limits do not apply to that commitment. If a regulated financial service provider enters into a Mortgage Offer (Sanction in Principle) commitment after the date on which the LTV/LTI limits come into effect, the limits do apply to that commitment should the mortgage be drawn down.
- Committed but undrawn amounts on an existing mortgage lending facility that was formally agreed via a signed letter of offer before the date on which the LTV/LTI limits come into effect will not be included in the limits.
277. Deputy Michael Moynihan asked the Minister for Finance the position regarding the charge on a property when the full moneys owed on the mortgage account have been paid to the mortgage provider but the deeds to the property have not yet been released and have now been transferred to another entity (details supplied); and if he will make a statement on the matter. [41203/14]
View answerNeither I nor the Special Liquidators are able to discuss the circumstances of individuals who had accounts with IBRC and it would not be appropriate to discuss such matters through Dáil business. The Special Liquidators retain responsibility and authority for determining the strategy, commercial policies, and for conducting the day-to-day operations of IBRC (In Special Liquidation) and I cannot intervene in the day-to-day management decisions of the bank.
I would recommend that the mortgage holder contacts the new purchasers of the mortgage as soon as it is feasible in order to resolve this matter.
278. Deputy Róisín Shortall asked the Minister for Finance the purpose and reasoning, and the evidence supporting this reasoning, for the decision to remove the 80% windfall tax applying to chargeable gains on the disposal or development of land which are attributable to planning decisions made since October 2009; and if he will outline the bodies or persons who lobbied him, his party or his Department seeking such a decision in advance of the budget. [41210/14]
View answerThe windfall tax provisions are contained in Sections 644AB and 649B Taxes Consolidation Act (TCA) 1997, introduced by Section 240 National Asset Management Agency Act 2009 and amended by Section 25 Finance Act 2010, and apply an 80% rate of tax to the windfall profits or gains from land disposals or land development where those profits or gains are attributable to a relevant planning decision by a planning authority. Profits or gains from these activities that are not attributable to a relevant planning decision are taxed in the normal way. In Budget 2015, I announced the abolition of the windfall tax provisions from 1 January next and this is being provided for in the Finance Bill published last month.
The Construction 2020 Strategy for Ireland Report published in May 2014 focuses on the steps that can be taken in the immediate future to ensure that necessary and sensible development can take place in the construction sector and that such development is not held back by unnecessary obstructions. One of the action points in the Report requires consideration of the tax code as it applies to the construction and property sector to establish if they are fit for purpose and otherwise to improve, abolish or replace them.
In that context, my Department and the Office of the Revenue Commissioners undertook a review of the windfall tax provisions as part of this year s Budget and Finance Bill process. In the course of that examination, the views of the Department of the Environment, Community and Local Government and of the National Asset Management Agency were sought on the provisions and the views on the windfall tax as expressed by bodies such as the Housing Finance and Sustainable Communities Agency were also considered. Arguments for the significant amendment or abolition of the windfall tax provisions were made in a number of pre-Budget submissions sent to me by various bodies, including the Construction Industry Federation, Dublin Chamber of Commerce, the Society of Chartered Surveyors, Property Industry Ireland and Chambers Ireland.
There are a number of reasons why, on foot of the review by my Department and the arguments made by others, that I decided to abolish the windfall tax provisions. No gains or profits to which the current provisions apply have been returned since their introduction in 2009. While this is due largely to the lack of activity in the property market over much of this time, there is considerable doubt that the provisions would operate in an effective way on the ground or could be amended to operate effectively. More significantly, however, the views which I have seen expressed by various parties in both the private and public sector with an interest in the proper development of the housing market, and with which I agree, are that the windfall tax provisions are acting and will act as an impediment to land rezoning, land development and redevelopment and to land sales for development.
The abolition of the windfall tax provisions should be seen in the context of other decisions and proposals announced recently, including those by my colleague the Minister for the Environment, Community and Local Government, which are focused on encouraging increased activity in the residential construction sector to meet increasing demand for housing. I indicated in my Budget speech, however, that while the Government is doing its part to remove impediments to a fully functioning property market, there will be no return to the past where tax incentives for developers drove supply. I also announced in the Budget that there will be a consultation in the coming months on taxation measures that might be introduced to address the issue of land owners who do not develop zoned and serviced land.
279. Deputy Róisín Shortall asked the Minister for Finance further to Parliamentary Question No. 210 of 13 May 2014 and the acknowledgement therein that the Revenue Commissioners recognise that the person in question acted in good faith based on the information they received, and further to several phone-calls to the Revenue Commissioners from this Deputy's office in relation to this case, if he will outline if the arrears that were attributed to a person (details supplied) in Dublin 11 have now been cancelled. [41211/14]
View answerI am advised by Revenue that it fully accepts that the person in question did not pay his original Household Charge (HHC) liability on foot of information that he received from the Local Government Management Agency in respect of his obligations.
On that basis, as outlined by me in Question 21424/14, Revenue agreed that the person would only pay the original €100 charge rather than the higher €200 'late' charge as provided for in Section 156 of the Finance (Local Property Tax) Act 2012 (as amended).
Revenue also accepts that the person paid the €100 liability immediately on receipt of confirmation that the lower amount was acceptable given the circumstances of the case. On receipt of the payment Revenue updated the person's record to reflect full compliance with his obligations.
Unfortunately a subsequent technical issue mistakenly removed the 'paid marker' from the person's file, which resulted in further unnecessary engagement and an additional payment being made that was not correctly due.
To bring matters to a conclusion, a member of the LPT made direct contact with the person and with his agreement transferred the excess payment to his 2015 LPT liability.
Revenue has assured me that the person's HHC liability is fully paid on foot of the €100 payment made and that all additional liabilities have been removed from his record. Revenue has also confirmed that the person is aware that he should reduce his 2015 LPT payment on foot of the excess HHC payment that has been transferred to that liability.
280. Deputy Paul Murphy asked the Minister for Finance further to Parliamentary Question No. 475 of 23 September 2014 his views regarding the possible increase in buildings insurance premia given the increased cost in rebuilding homes due to charges for water usage while rebuilding or renovating buildings. [41221/14]
View answerIn my role as Minister for Finance I have responsibility for the development of the legal framework governing financial regulation. Neither I nor the Central Bank of Ireland, as regulator, interfere in the pricing of insurance products. The provision of insurance cover and the price at which it is offered is a commercial matter for insurance companies and is based on an assessment of the risks they are accepting and adequate provisioning to meet these risks.
The EU framework for insurance expressly prohibits Member States adopting rules which require the prior approval or systematic notification of certain matters, including general and special policy conditions and scales of premiums. Furthermore, in the context of non-life insurance, which includes public indemnity insurance, the EU framework provides non-life insurers with the freedom to set premiums. This has been acknowledged by the European Court of Justice.
The Central Bank does not regulate premiums in the insurance market. Insurance companies consider a number of risks when determining the premium for a proposed insurance policy, whether that is a general insurance policy such as motor or home insurance, or a life assurance policy. A premium is based on the actuarial calculation of risk.
Consumers are encouraged to shop around at the time of insurance renewal. The National Consumer Agency has information which may assist a consumer to shop around it can be found at http://www.consumerhelp.ie/getting-insurance-quotes#Shopping.
281. Deputy Michael McGrath asked the Minister for Finance the financial exposure of the National Pensions Reserve Fund and other agencies under the National Treasury Management Agency to the planned incinerator at Poolbeg, Ringsend, Dublin 4; and if he will make a statement on the matter. [41234/14]
View answerThe National Pensions Reserve Fund (NPRF) has advised that it has committed €44 million to the Covanta waste to energy project as part of a group of six senior debt funders.
282. Deputy Ruth Coppinger asked the Minister for Finance further to Parliamentary Question No. 232 of 17 September 2014, if he is in favour of a change to the EU VAT directive and relevant orders to allow for a zero rate of VAT for the purchase of defibrillators for community and sporting organisations. [41297/14]
View answerAs outlined in the response to Parliamentary Question No. 232 of 17 September 2014, defibrillators, other than implantable defibrillators, are liable to VAT at the standard rate of 23% in compliance with EU VAT law.
EU VAT law, with which Irish VAT law must comply, is strict on the application of a zero rate of VAT to goods or services. Article 110 of the EU VAT Directive law provides that it is only possible to apply a zero rate to goods and services where a Member State applied a zero rate to a specific good or service, that is social in nature, and where it applied at a zero rate on and from 1 January 1991. Under existing VAT law, therefore, it would not be possible to apply the zero rate to the supply of defibrillators as they did not apply at a zero rate of VAT.
With regard to making changes at EU level to provide that other goods or services can apply at the zero rate, I would point out that zero-rating is an historical derogation from the normal VAT rules, where the intention is that such VAT treatment is temporary, and should be removed over time. In addition, only a small number of Member States apply zero-rated VAT treatment and the EU Commission has actively being trying to simplify the VAT rating system to improve the efficiency of the Single Market. For these reasons, I do not consider that a proposal to seek a zero rate of VAT for the purchase of defibrillators for community and sporting organisations would succeed.
283. Deputy Michael McGrath asked the Minister for Finance the total number of interest paying accounts on which DIRT tax was paid in each year from 2011 to 2013; and if he will make a statement on the matter. [41302/14]
View answer284. Deputy Michael McGrath asked the Minister for Finance the average payment of DIRT tax per eligible account in which a DIRT tax liability arose in each year from 2011 to 2013; and if he will make a statement on the matter. [41303/14]
View answer286. Deputy Michael McGrath asked the Minister for Finance the tax forgone as a result of the DIRT tax exemption scheme in 2011, 2012 and 2013; and if he will make a statement on the matter. [41305/14]
View answer287. Deputy Michael McGrath asked the Minister for Finance the number of deposit-savings accounts yielding less than €10,000 in DIRT tax; €10,001 to €25,000, €25,001 to €50,000, €50,001 to €100,000, €100,001 to €200,000, €200,001 to €300,000, €300,001 to €400,000, €400,001 to €500,000, €500,001 to €600,000, €600,001 to €700,000, €700,001 to €800,000, €800,001 to €900,000, €900,001 to €1,000,000 and above €1 million in 2013; and if he will make a statement on the matter. [41306/14]
View answerI propose to take Questions Nos. 283, 284, 286 and 287 together.
I am informed by the Revenue Commissioners that the amount of Deposit Interest Retention Tax (DIRT) collected in 2011 to 2013 is available in the "Net Receipts" section of the Revenue's Statistics webpage: http://www.revenue.ie/en/about/statistics/index.html.
I am further informed by the Commissioners that DIRT on interest bearing deposits is declared and paid on a four-times yearly basis by financial institutions: in April, July and October of the tax year in question and in the following January. Returns for each year are due by 15 January of the following year and the total value of DIRT due and paid is reported to Revenue on the January returns at institutional level. Sufficiently detailed figures are not required in these returns to identify the numbers of accounts on which DIRT was paid, the average DIRT payment per account or the tax forgone resulting from DIRT exemptions.
Separately, under regulations, as provided for in Section 891B of the Taxes Consolidation Act 1997, certain financial institutions, such as banks and credit unions, are required to make automatic annual returns at account level electronically to Revenue. The primary purpose of this Section is to provide information for use in risk analysis by Revenue and therefore the requirement to report interest focuses on account holders in receipt of larger payments. The information under S891B is provided where the total payment of interest is greater than €635 in a year, regardless of deduction of DIRT, and in all instances of a first interest payment irrespective of threshold for accounts opened on or after 1 January 2008. These returns include DIRT exempt accounts. Returns for 2011, 2012 & 2013 were due by the end of March 2012, 2013 and 2014 respectively. It is important to note the information received under Section 891B is not limited to individuals but also includes interest payments on accounts held by corporations and other entities.
The number of interest bearing deposit accounts reported under the S891B regulations for 2011, 2012 & 2013 is 1.43 million, 1.22 million and 1.07 million respectively. The total value of interest paid to these accounts for 2011, 2012 and 2013 is €2.42 billion, €2.10 billion and €1.88 billion respectively. Financial institutions reported that DIRT was not deducted on around 190,100, 194,000 and 183,600 of these accounts for 2011, 2012 and 2013 respectively but data on the amount of DIRT forgone in respect of such accounts is not available. The amount of DIRT is not returned at account level in the S891B returns so it is not possible to provide analysis by range as requested in Question 41306/14. These figures are provisional and may be subject to revision.
285. Deputy Michael McGrath asked the Minister for Finance the amount raised to date from the bank levy introduced in budget 2014; the number of institutions on which the levy was applied; and if he will make a statement on the matter. [41304/14]
View answerI am informed by the Revenue Commissioners that the yield to date from the bank levy announced in Budget 2014 is €154.4 million (the forecast was €150 million). There are 13 financial institutions subject to the bank levy introduced in Finance (No 2) Act 2013. A further 6 financial institutions are excluded from the levy because their deposit interest retention tax payment for 2011 is below the de minimis threshold of €100,000.
288. Deputy Michael McGrath asked the Minister for Finance if he has examined the feasibility of charging DIRT at the account holders' marginal tax rate rather than a flat rate of 41%; and if he will make a statement on the matter. [41307/14]
View answerDIRT is deducted at source by financial institutions. In order to charge DIRT at an account holder's marginal tax rate a financial institution would need to be aware of a depositor's marginal rate at the time that interest is paid or credited to any account held by such depositor. The Deputy will be aware that a taxpayer's marginal rate may change throughout the year in line with changes in their circumstances. While the feasibility of providing financial institutions with the necessary information to operate the tax on this real-time basis has not been examined, it would present major challenges including substantial investment in systems development by Revenue and financial institutions and a very significant amendment to the statutory confidentiality of taxpayer information. In contrast to the current regime, where the DIRT is a final liability charge on the interest received by most depositors, tax deducted at the depositor's marginal rate at the time of interest payment could require end-of-year refunds or additional payments by depositors, many of whom may not normally submit an annual tax return.
289. Deputy Finian McGrath asked the Minister for Finance the position regarding mis-selling of a pension policy and the role of the Financial Services Ombudsperson (details supplied) [41309/14]
View answerFirstly, I must point out that the Financial Services Ombudsman is independent in the performance of his statutory functions and it would not be appropriate for me to comment on how he performs those duties.
The Financial Services Ombudsman Bureau was established under the Central Bank and Financial Services Authority of Ireland Act 2004. This legislation provides the Financial Services Ombudsman with various powers in order to determine jurisdiction on a complaint. Included in this is a statutory timeframe.
Section 57BX (3)(b) provides:-
"A consumer is not entitled to make a complaint if the conduct complained of occurred more than 6 years before the complaint is made." Therefore, the legislation prohibits the Financial Services Ombudsman from examining any aspect of a complaint where the conduct being complained of occurred more than 6 years prior to the receipt of the complaint in his Office.
The Pensions Ombudsman investigates and decides complaints and disputes from individuals about their occupational pension schemes, Personal Retirement Savings Accounts (PRSAs) and Trust RACs where there is both maladministration and financial loss. He is completely independent and impartial. Section 131(4) of the Pensions Act 1990, as amended, provides that a complaint to the Pensions Ombudsman must be made "(a) within whichever of the following periods is the last to expire (i) 6 years from the date of the act giving rise to the complaint or reference, or
(ii) 3 years from the earlier of the following 2 dates, namely, the date on which the person making the complaint or reference first became aware of the said act and the date on which that person ought to have become aware of that act, or
(b) within such longer period as the Pensions Ombudsman may allow if it appears to him that there are reasonable grounds for requiring a longer period and that it would be just and reasonable so to extend the period."
The Deputy may wish to consider whether the nature of the complaint would come within the remit of the Pensions Ombudsman.
290. Deputy Alan Shatter asked the Minister for Finance if he will engage with the relevant authorities in the United States with a view to concluding an updated double taxation agreement along the lines of the current double taxation agreement in existence between the United States and the UK addressing inheritance tax matters; his views that the more favourable treatment in the United States of UK spouses under the current US-UK arrangements in respect of inheritance tax matters as compared to Irish spouses is anomalous and unfair; and if he will make a statement on the matter. [41324/14]
View answerI am informed that no contact has been made with officials in my Department or in the Revenue Commissioners as regards there being any adverse issues in relation to the application of the terms of the Ireland-US double taxation agreement. If any such issues are brought to attention they will be examined in detail to see whether they can be accommodated administratively under the current double taxation agreement or whether it is necessary to commence negotiations for the updating of the double taxation agreement.
291. Deputy Colm Keaveney asked the Minister for Finance the number of meetings he or officials from his Department had with a person (details supplied); the purpose of each of those meetings; and if he will make a statement on the matter. [41329/14]
View answerIn response to the question, I can confirm that there have been no meetings between myself, or the Department of Finance, and Irish Water or the individual named in the period.
However Department of Finance officials were in attendance at Department of the Environment and Local Government meetings with Irish Water (where Mr Tierney was also in attendance)
Additionally, the Department, in its capacity as coordinator of the EU/IMF programme, facilitated a number of meetings between Irish Water and the troika. Mr John Tierney attended these meetings, which in line with practice were held in my departments' offices as part of the 12th EU-IMF Review Mission on 31 October 2013 and the 1st Post-programme review mission on 2 May 2014.
These meetings were requested by the troika as part of their monitoring of the implementation of the commitments in the EU-IMF programme of Financial Support to Ireland (October 2013 meeting). The May 2014 meeting was similarly requested by the troika in the context of the 1st Post-programme review meeting (April-May meeting). Department of Finance officials were in attendance as observers at both meetings and were not active participants in either.
