Written Answers Nos 65-96
67. Deputy Clare Daly asked the Tánaiste and Minister for Social Protection her policies regarding the provision of cover staff, or funding for cover staff, in her Department's disability allowance section so that cover is provided for persons on sick leave and inordinate delays in processing of claims are prevented. [7228/16]
View answerMy Department has limited sanction to recruit temporary clerical officers to cover critical long term staff absences. The staffing needs for all areas within the Department, including the Disability Allowance (DA) scheme area, are continuously reviewed, taking account of workloads, management priorities and the competing demands arising, to ensure that the best use is made of all available resources with a view to providing an efficient service to those who rely on the schemes operated by the Department.
The DA scheme area is continuously monitored and reviewed to ensure customers are responded to quickly as possible and that claims are processed as expeditiously as possible. The DA scheme area has been successful in improving response times for new applications over the past year. In February 2016, there were 4,422 DA new claims awaiting a decision. This is a reduction from 4,944 in February 2015. The average time to award a DA new claim is currently 11 weeks, which again is a reduction from 12 weeks in 2015. These outcomes were achieved in the face of an increase in volume of new applications being received in the period in question.
68. Deputy Jim Daly asked the Tánaiste and Minister for Social Protection the grants available to voluntary organisations for acquiring new equipment in her Department; and if she will make a statement on the matter. [7245/16]
View answerThe Department of Social Protection provides a range of supports to community organisation through schemes such as community employment, Tús, the rural social scheme and the community services programme. These supports are structured in the form of direct and indirect provision of funding for staff to enable the delivery of services. The Department does not operate any scheme that provides direct funding for the provision of equipment to community organisations.
69. Deputy Éamon Ó Cuív asked the Minister for Finance the status of meetings held since November 2015 with the insurance industry; if he has reached agreement in respect of homeowners being refused flood cover because of the perceived threat of flooding; if he will advise residents accordingly; and if he will make a statement on the matter. [6509/16]
View answerThe Taoiseach and some other of my colleagues in Government met the insurance industry on Tuesday 12 January 2016 to discuss the industry's role in providing flood insurance and to obtain the industry's views on flood insurance issues.
I am aware of the difficulties that the absence or withdrawal of flood insurance cover can cause to homeowners and the current flooding crisis has raised issues in relation to insurance and flooding. However, 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 willing to accept and adequate provisioning to meet those risks. In 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, can interfere in the provision or pricing of insurance products or have the power to direct insurance companies to provide flood cover to specific individuals or businesses.
Government policy in relation to flooding is focused on the development of a sustainable, planned and risk-based approach to dealing with flooding problems, with a view to addressing the increased availability of flood insurance. To achieve this aim, there is a focus on prioritising spending on flood relief measures, development and implementation of plans by the Office of Public Works (OPW) to implement flood relief schemes. This strategy is complemented by a Memorandum of Understanding between the OPW and Insurance Ireland which provides for the transfer by the OPW of data in relation to completed flood defence schemes to the insurance industry, which should provide a basis for the increased provision of flood insurance in areas where works have been completed.
I would also add that my officials are undertaking research in the area of flood insurance which will include an analysis of the different approaches to flood insurance taken in other countries. This will then feed into a report to Government from the Inter-Departmental Flood Policy Co-Ordination Group which is expected to be completed before the summer.
70. Deputy Jack Chambers asked the Minister for Finance to initiate a working group to address the issue of persons in private estates or apartments having to pay full management fees and property tax on their net income; and if he will make a statement on the matter. [6941/16]
View answerThe introduction of a local property tax is part of a broader approach to the taxation of property. The aim is to replace some of the revenue from transaction based taxes, which have proven to be an unstable source of Government revenue, with an annual recurring property tax, which international experience has shown to be a stable source of funding.
The Government decided that the LPT should be centred on the principles of equity, transparency and simplicity; and that a universal liability should apply to all owners of residential property with a limited number of exemptions and reliefs. Limiting the reliefs available allows the rate to be kept to a minimum for those liable persons who do not qualify for relief.
Properties in managed estates, to which management fees apply, would have been purchased by their owners in the knowledge that they would be taking on commitments to partake in, and to fund, the management of the estate, and that it was the intention that many such estates would not be taken in charge by local authorities, nor would it be appropriate for local authorities to do so.
Management fees in these estates can include services such as refuse collection, maintenance of common areas as well as a sinking fund for certain repairs to the buildings, depending on circumstances. These are costs which homeowners in other households have to fund themselves for their own properties.
Revenue from the LPT accrues to local authorities and supports the provision of local services. Local authorities provide a broad range of services in the public realm, which benefit the wider community. The proper functioning of these services is important for the well-being of every community and household. These services include: fire and emergency services; road maintenance and cleaning; street lighting; spatial and development planning and other similar services; regulatory and inspection functions and business support services, as well as libraries, parks, and other recreation and cultural public amenities. The benefits of these services accrue to all members of society.
I have no plans to initiate a working group along lines suggested in the Deputy's question.
71. Deputy Róisín Shortall asked the Minister for Finance the steps he is taking to curb the escalating costs of motor insurance; the working groups he has established to deal with this issue; when he established these; the constituent members; the remit of the working groups; the expected outcome of their work; the deadline they are working to; the extent to which he has consulted motorist interest groups on this issue; and if he will make a statement on the matter. [7156/16]
View answerThe cost of insurance is a complex issue involving a number of different parties, including Government Departments, State Bodies and private sector entities.
My Department has commenced a Review of Policy in the Insurance Sector. This is being undertaken in consultation with the Central Bank of Ireland and other Departments and Agencies. The objective of the Review is to recommend measures to improve the functioning and regulation of the insurance sector.
This Review will include an examination of the factors contributing to the cost of insurance and my officials have had preliminary meetings with the Department of Jobs, Enterprise and Innovation and the Personal Injuries Assessment Board (PIAB) in this regard. The Department of Jobs Enterprise and Innovation have advised that the Personal Injuries Assessment Board (PIAB) expects to have the revised Book of Quantum ready as soon as possible. The Book is not a recommendation for compensation levels but rather a reflection of the prevailing level of awards, that is: compensation values awarded by the courts; settlements agreed by the insurance industry; settlements agreed by the State Claims Agency; and settlements agreed through the PIAB process. With regard to competition, the National Competitiveness Council emphasises that a resilient and well-functioning insurance sector contributes to economic activity and financial stability.
The Department of Finance is working closely with the Central Bank of Ireland and has met with other stakeholders including the European Commission, Insurance Ireland, the Irish Brokers Association, the State Claims Agency and the Accountant of the Courts of Justice in the context of the functioning and regulation of the insurance sector generally. The consultation process will continue and will extent to consultation with certain motoring interest groups in due course.
The first phase of the Review of Policy in the Insurance Sector is, however, concentrating on an examination of the framework for motor insurance compensation in Ireland. This work is being conducted by a Joint Working Group comprising officials of my Department and of the Department of Transport, Tourism and Sport, which began its work in January of this year. The Joint Working Group will shortly report to myself and the Minister of Transport, Tourism and Sport with recommendations for our consideration. In turn these recommendations will be submitted to Government in the coming weeks.
The outcome of this work will feed into the wider review of policy in the insurance sector which I have outlined above. This work will continue over the coming months and is expected to be completed by the end of this year, with the final report to be presented to Government in due course.
72. Deputy Paul Murphy asked the Minister for Finance the number of acres of residential land the National Asset Management Agency controls directly or has an interest in through loans owed to it by county. [6302/16]
View answerI am advised, by NAMA, that through its loans it has an indirect exposure to approximately 2,800 hectares of residential development land in Ireland. This land is owned by NAMA debtors or, in the case of enforcement, is managed on behalf of debtors by duly appointed insolvency practitioners.
Section 10 of the NAMA Act requires NAMA to obtain the best financial return for the State, deal expeditiously with the assets acquired by it and protect or otherwise enhance the value of those assets. In line with this, NAMA is working with debtors and receivers to identify, where commercially feasible, opportunities to bring forward new residential development on this land. In this respect, NAMA has indicated that it expects to be in a position to fund up to 20,000 new residential units in Ireland by 2020, subject to commercial feasibility. This equates to approximately one-fifth of expected demand for housing over that period, which means that NAMA can make a very substantial contribution and that other sources of new output are also needed.
Reflecting both demand and economic viability, over 90% of the units which NAMA expects to fund will be in Dublin and the neighbouring counties of Wicklow, Kildare and Meath. NAMA's funding is focused in particular on the starter home market.
NAMA is already making significant progress in this respect:
- Since 2014, it has funded the construction of 2,700 new residential units in Ireland on residential development land within its portfolio (of which, 2,400 are in the Dublin area).
- In addition, on development land identified in Table 1 below, a further 3,300 are under construction (of which 2,700 are in the Dublin area);
- Planning permission has been granted for an additional 4,800 units (of which 4,200 are in the Dublin area);
- Planning applications have been lodged for 4,300 units (of which 3,500 are in the Dublin area);
- New applications will be lodged within the next 12 months for 7,237 units (of which 5,800 are in the Dublin area).
In some areas within Dublin and the wider Dublin area development remains unviable for commercial, planning and infrastructural reasons, with the latter being a major issue in certain areas in which development might otherwise be economically viable.
Outside the Dublin area, there are very substantial commercial, planning and infrastructural barriers to new development. Much of the development land within NAMA's portfolio outside the major urban areas is, therefore, unlikely to be viable within the next five years without substantial progress by public authorities in terms of putting in place the necessary planning frameworks and addressing public infrastructure deficits, for example, roads, water, sewerage, transport and schools.
Where such infrastructure investment takes place it should be targeted at those areas in which development is likely to become commercially viable over the medium-term partly as a result of this investment. Targeting infrastructure investment with consideration to the commercial viability of development is extremely important due to the fact that in many parts of the country, residential development will not become commercially viable over the medium-term even if planning and infrastructural constraints are addressed due to a lack of demand or other legitimate reasons.
Table 1: Breakdown by county of residential development land controlled by NAMA debtors and receivers as of April 2016
|
County |
Sum of Area (Hectares) |
|
Carlow |
13 |
|
Clare |
5 |
|
Cork |
620 |
|
Donegal |
4 |
|
Dublin |
1,173 |
|
Galway |
48 |
|
Kildare |
204 |
|
Kilkenny |
33 |
|
Laois |
30 |
|
Leitrim |
6 |
|
Limerick |
115 |
|
Louth |
13 |
|
Mayo |
11 |
|
Meath |
100 |
|
Monaghan |
5 |
|
Offaly |
12 |
|
Roscommon |
5 |
|
Sligo |
5 |
|
Waterford |
57 |
|
Westmeath |
77 |
|
Wexford |
30 |
|
Wicklow |
240 |
|
Grand Total |
2,806 |
73. Deputy Paul Murphy asked the Minister for Finance the number of residential units the National Asset Management Agency owns, controls, or has an interest in, directly or indirectly, and the number of such residential units that have been sold on to investment funds and to real estate investment trusts since the agency was established. [6303/16]
View answerNAMA does not own or sell properties. NAMA has acquired loans. The properties that secure these loans are owned by NAMA debtors and NAMA's legal relationship to those properties is similar to a bank which holds security over a person's house that has a mortgage. NAMA, unlike other lenders, generally has no residential mortgages, owner-occupier or buy-to-let, in its portfolio except in a very small number of cases where it holds debtor principal private residences as security for loans.
NAMA requires that the sale of properties by debtors and receivers be openly marketed to ensure that the best available price in the market at the time of the sale is achieved. In its capacity as a secured lender, NAMA has approved the sale by debtors and receivers of 12,781 residential property units since inception. 88% (11,219 of the 12,781 units) were sold on the open market by NAMA debtors and receivers in individual sales transactions to individual house buyers.
The remaining units, 1,562 units, (12% of the total) were sold on the open market by NAMA debtors and receivers as part of larger group or portfolio sales. The properties that were sold in groups or portfolios were typically already tenanted and vacant possession was not sought prior to the sale. Such portfolios are, as a consequence, generally acquired by investors seeking long-term rental streams, rather than seeking to sell the properties in the short-term, and therefore existing tenancy arrangements tend not to be impacted by such sales.
I am advised by NAMA that there are approximately 6,700 residential properties currently within the NAMA portfolio. Just over 6,000 of these units are currently occupied by tenants. The remaining 700 units are actively on the market for sale by their debtors and receivers.
It should also be noted that, in addition to repaying its debt, NAMA generally uses the proceeds of sales to fund the construction of new homes on a commercial basis. This is in accordance with NAMA's Section 10 obligation to seek to protect or enhance the value of its acquired assets and NAMA's sales, in this way, contribute to an increase, not a reduction, in market supply. New supply funded by NAMA is typically sold on the open market in individual lots to individual house buyers.
74. Deputy Paul Murphy asked the Minister for Finance the expenditure by the National Asset Management Agency on providing social housing and on providing offices to date, by year; and the agency's projected annual spend on social housing and offices in 2016 and in 2017. [6304/16]
View answerI am advised that to date, NAMA has committed over €260 million in making properties available for social housing through local authorities and approved housing bodies. This comprises €100m in capital expenditure to complete houses and apartments and €160m to acquire properties through NARPS, NAMA's social housing special purpose company, for onward leasing to local authorities and approved housing bodies.
As the Deputy will be aware, NAMA made over 6,635 residential properties available to the Housing Agency for social housing. This represented the totality of vacant residential property in NAMA's original acquired portfolio that was potentially suitable for social housing. Local authorities, through the Housing Agency, confirmed demand for 2,531 of the 6,635 properties made available by NAMA and 2,042 of these properties have been transferred to local authorities and approved housing bodies for social housing. Future expenditure by NAMA under this initiative will be determined as local authorities and approved housing bodies enter into contracts to buy or lease remaining properties for which demand has been confirmed.
NAMA is, as the Deputy is aware, currently funding the development of new housing in line with its statutory mandate to preserve or enhance the value of its acquired assets. Since 2014, NAMA has funded the completion of 2,700 new residential property units in Ireland, of which over 2,400 were in the Dublin area. An additional 3,360 NAMA-funded units are under construction, 2,700 of which are in the Dublin area. NAMA has indicated that it may fund up to 20,000 new residential units, over 90% of which will be in the Dublin area, by 2020, subject to commercial viability. In accordance with Part V legislation, 10% of all new housing units funded by NAMA will be made available for social housing.
I am further advised by NAMA that to date, it has advanced over €250m in capital expenditure to facilitate the provision of office space to meet demand from both domestic and FDI employers.
NAMA also advises that, to date, it has approved approximately €250m for ongoing and future development projects which will facilitate the provision of new office accommodation in 2016 and 2017, primarily within the Dublin Docklands Strategic Development Zone (SDZ) planning scheme area. Of this €250m in approved funding, €37m has been drawn down to date reflecting the stages involved in development projects including, prior to construction, planning, design and tendering and the phased nature of construction projects. NAMA has estimated that the Docklands SDZ development programme will require total funding of €1.9 billion with peak funding up to €500m. NAMA's contribution to this funding requirement will be determined in accordance with the agreed delivery strategy for each development site in which it has an interest.
75. Deputy Paul Murphy asked the Minister for Finance the number of debtors who have exited the National Assets Management Agency to date; the number of these who have repaid their debts in full; the total original debts owed to the agency by such exited debtors, and the amount recovered by the agency from them. [6305/16]
View answerNAMA originally paid €31.8 billion to acquire a €74 billion loan book, comprising of 779 debtor connections. I am advised that, as at 31 March 2016, 442 debtor connections with a par debt of €18.5 billion had exited NAMA. This comprises debtor connections that reached a final agreement with NAMA and debtor connections whose loans were sold. 44 debtor connections have repaid their par debt in full. I am further advised that the 442 debtor connections have repaid €9.6 billion to the Agency.
76. Deputy Paul Murphy asked the Minister for Finance the final amount the National Assets Management Agency is expected to recover on its debts relative to the €74 billion of loans it acquired; and the amount recovered to date by year. [6306/16]
View answerAt inception, NAMA acquired loans with balances of €74 billion and with a current market value of €26.2 billion at acquisition. In accordance with the European Commission's valuation methodology, NAMA paid €31.8 billion for these loans, including €5.6 billion in State aid to the five participating institutions.
It is important to recognise that NAMA acquired loans valued by reference to a property collateral valuation date of 30 November 2009. As a result, NAMA absorbed losses arising from the 25%-30% decline in Irish property values over the following four years up to the end of 2013. It is estimated that this market decline reduced the value of the loans by another €4.5 billion which is additional to €5.6 billion in State Aid.
Having said that, NAMA is on track to recover all of the €31.8 billion it paid to the banks, including the €5.6 billion in State aid and the €4.5 billion of further value declines to the end of 2013. In addition, NAMA expects, based on current projections, to generate a surplus of up to €2 billion by the time it completes its work after all its financial obligations have been repaid.
NAMA's cash generation for each year since its inception is set out in the table below.
NAMA Cash Generation (€m)
|
Year |
Cash Generation (€m) |
|
2010 |
1,104 |
|
2011 |
5,085 |
|
2012 |
4,505 |
|
2013 |
4,480 |
|
2014 |
8,562 |
|
2015 |
9,093 |
|
To end Q1 2016 |
1,372 |
|
Total |
€34.1 billion |
I would also refer the Deputy to NAMA's Annual Reports and Accounts for each full year of operation, as well as its Quarterly Reports and Accounts, all of which are available on NAMA's website, are laid before the Oireachtas and are subject to scrutiny by the Public Accounts Committee. I expect NAMA Annual Report for 2015 to be published in late May 2016.
In addition to NAMA's financial statements and accounts, these reports provide supplementary information required under Section 54 of the NAMA Act as set down by the Oireachtas, including:
- a breakdown of the number and condition of outstanding loans held by NAMA,
- a breakdown of disposal and non-disposal cash receipts,
- performance metrics for outstanding loans held by NAMA both by nominal value (i.e. outstanding loan balance) and carrying value,
- a categorisation of non-performing loans as to the degree of default by both nominal and carrying value,
- the number of loans foreclosed,
- the number of cases where liquidators and receivers have been appointed, and
- the legal proceedings commenced by NAMA.
77. Deputy Paul Murphy asked the Minister for Finance the annual cost of tax relief for real estate investment trusts since they were established; and if he will make a statement on the matter. [6307/16]
View answerFinance Act of 2013 introduced the regime for the operation of Real Estate Investment Trusts (REITs) in Ireland. A REIT is a collective investment vehicle designed to hold properties in a tax neutral manner. I am informed by the Revenue Commissioners that there are currently three REITs established and operating in Ireland.
The function of the REIT framework is not to provide an overall tax exemption, but rather to facilitate collective investment in rental property by removing a double layer of taxation which would otherwise apply on property investment via a corporate vehicle.
In general, the trading profits of companies in Ireland are subject to Corporation Tax at 12.5%. Rental profits of companies are subject to Corporation Tax at 25%. Rental profits arising in a REIT are exempt from Corporation Tax. However, profits from any other activities are subject to Corporation Tax in the normal way.
As such, the estimated cost attached to the REIT relates not to an exemption from tax, but rather to the move from direct taxation of rental income to the taxation of dividends distributed from REIT profits arising from that rental income. The extent of any net tax cost of the REIT exemptions will therefore be the difference between the tax which would have arisen on the property income in non-REIT ownership, and the tax charged on the dividends paid out of that property income by the REIT to their investors. The REIT legislation requires that 85% of all property income profits be distributed annually to shareholders.
Any potential loss of tax relating to foreign investors is due to the difference between how company dividends are taxed in the hands of foreign investors compared to how profits from direct ownership of property are taxed. Ireland, in line with most countries, retains the right to tax profits arising from land and buildings in the State, regardless of where the owner is located. In contrast, taxing rights for dividends are usually divided between countries, based on tax treaty agreements. In general, Ireland allows for dividends of Irish companies to be paid to shareholders resident in treaty partner countries without any liability to Irish tax. This is because tax should already have been paid on the company's profits in Ireland the dividends are paid out of the after-tax profits of the company and the dividends received will form part of the shareholder's income for tax purposes in their country of residence.
In the absence of any other provisions, foreign REIT shareholders would not have had any liability to Irish tax on REIT dividends, despite the fact that the REIT itself benefits from a tax exemption on qualifying profits of the rental business. In order to ensure that tax from foreign investors is retained, a Dividend Withholding Tax (DWT) at the standard rate of tax was legislated for to specifically apply to REIT dividends. Foreign investors from treaty resident countries may be able to reclaim some part of this DWT if the relevant tax treaty allows for this. The taxation of dividends varies from treaty to treaty, but commonly a source state would retain the right to approximately 15% tax on dividends paid from that state.
REITs are publicly listed companies, meaning their Financial Statements are publicly available, but the specific figures required to calculate their rental profit (the portion of profit that is exempt) is not necessarily available in these public documents. I am advised by the Revenue Commissioners that for reasons of taxpayer confidentiality, it is not possible to comment on specific details of rental profit, if any, of the limited number of REITs currently operating in Ireland.
78. Deputy Paul Murphy asked the Minister for Finance the annual cost of tax relief and exemptions availed of by private landlords, including mortgage interest relief, for each of the years 2011 to 2015. [6308/16]
View answerIt is assumed that the reference to private landlords in the Deputy's question refers to those letting private residential property. I am informed that the Revenue Commissioners do not require rental income to be returned in a manner which would enable private residential rental accommodation income, reliefs and allowances to be separately identified from income, reliefs and allowances in respect of commercial rental property. It is not therefore possible to provide the annual cost of tax relief and exemptions availed of by private landlords sought by the Deputy.
However, the Deputy may wish to note that the 2013 Report of the Comptroller and Auditor General contains, in Chapter 16, a detailed review of the taxation of rental income and expenses deductible therefrom. This report is available on the website of the Comptroller and Auditor General and can be accessed via the following link: http://audgen.gov.ie/documents/annualreports/2013/report/en/Chap16.pdf.
79. Deputy Paul Murphy asked the Minister for Finance the projected cost of the exemption from capital gains tax for property sold after being acquired and held for seven years. [6309/16]
View answerI am informed by the Revenue Commissioners that as this scheme was only introduced in Budget 2012, it is not possible at this time to estimate how many properties will be disposed and be eligible for this scheme or the amount of the resulting chargeable capital gain, if any, that may arise on such disposals. Accordingly, it is not possible to estimate the likely cost of the exemption.
80. Deputy Niall Collins asked the Minister for Finance if the lump sum paid to local authority members who retired at the 2014 local elections is taxable; and if he will make a statement on the matter. [6338/16]
View answerI am advised by the Revenue Commissioners that while statutory redundancy payments are exempt from income tax, any additional ex-gratia or termination payments, such as those made to local authority councillors on retirement, are chargeable to tax. Such payments may qualify for the partial exemption provided for in section 201 of the Taxes Consolidation Act 1997(the Act). This exemption is available to any employee in receipt of an ex-gratia payment on redundancy or termination of an office or employment.
Section 201 of the Act provides for the following exemptions:-
- A basic exemption of €10,160 increased by €765 for each full year of service with the employer.
- This basic exemption may be increased by an additional amount of €10,000 where an individual has not made any claims to exemptions in the previous 10 years. If the individual has made any such claims within that period the €10,000 figure is reduced by the value of any tax-free lump sum received. Any tax-free lump sum received or receivable under an occupational pension scheme must also be deducted from the increase to the basic exemption.
- The exemption may be further increased by the amount by which a sum, referred to as the "Standard Capital Superannuation Benefit" (SCSB), exceeds the total value of the exemptions set out above. This amount is calculated by multiplying 1/15th of the individual's annual income, averaged over the last three years, by the number of complete years of service with the employer, and deducting any tax-free lump sum received or receivable under any pension scheme.
It is worth noting that, from 1 January 2011, there is a lifetime cap on exemptions utilised in respect of all gratuities received, irrespective of the source of the gratuity. Therefore a Councillor who received a termination payment from a previous employer will need to provide their Local Authority with details of such payment to ensure the lifetime exemption ceiling of €200,000 is not exceeded.
Full details on the treatment of ex-gratia termination payments are available on the Revenue Commissioners website at http://www.revenue.ie/en/tax/it/leaflets/it21.html .
81. Deputy Michael McGrath asked the Minister for Finance his views on correspondence (details supplied) regarding the special liquidation of the Irish Bank Resolution Corporation. [6343/16]
View answerAs the Deputy is aware, the Special Liquidators of IBRC cannot discuss confidential customer information with third parties. Notwithstanding this, I have been advised that the correspondence which you supplied was passed onto the Special Liquidators and a response has been issued.
82. Deputy Frank O'Rourke asked the Minister for Finance the policy initiatives he has introduced to facilitate the National Asset Management Agency in providing social housing units; the number of such units these policy initiatives will provide; and if he will make a statement on the matter. [6362/16]
View answerI, and my officials, engage regularly with NAMA on issues such as social housing and residential supply more generally to benefit from NAMA's understanding and activity in the market; to better understand how NAMA's activity may have an impact on the market and to challenge NAMA to evaluate opportunities in line with objectives that may make a difference in the market. However, I have not issued any direction regarding NAMA's activities with regard to housing as decisions related to NAMA's portfolio are, ultimately, commercial decisions for the NAMA Board in the context of the Agency's independent mandate to obtain the maximum return to the State.
In this regard, and completely in line with their objectives, NAMA has made, and is making, a very substantial contribution to the supply of properties for social housing.
NAMA has consistently been mindful of commercially attractive opportunities in the social housing sector and has innovated to combine its commercial priorities with due consideration of ancillary social contributions. In this regard, NAMA has played a very important role in facilitating, on a commercial basis, the supply of social housing from within its existing portfolio. I am advised that NAMA has offered 6,635 residential units to Local Authorities for social housing. This represents the entirety of vacant residential property within NAMA's portfolio that was available and potentially suitable for social housing. There is extensive detail on this initiative on NAMA's website, www.nama.ie/social-initiatives/ and on the Housing Agency's website, www.housing.ie/NAMA.aspx
Under this initiative, NAMA identified potentially suitable properties to the Housing Agency, who engaged with Local Authorities and Approved Housing Bodies in order to establish the areas of demand, number, and allocation of properties. NAMA does not have a role in determining which properties are required by the Housing Agency, Local Authorities, and Approved Housing Bodies, nor the number or allocation of properties accepted. The onus for determining the suitability of these properties for social housing purposes rests with the Local Authorities, the Housing Agency and the Approved Housing Bodies. Where demand is confirmed for a property, NAMA makes whatever funding is needed, more than €84m to date, to ensure that previously unfinished properties are completed and comply fully with all building standards.
Following NAMA's identification process, I am advised that Local Authorities confirmed demand for 2,531 of the 6,635 offered units, of which 2,042 have been transferred for social housing at an overall cost to NAMA in excess of €250m. These 2,042 units represent more than one-third of the 5,700 social housing units made available from all market participants under Part V legislation between 2002 and 2011, when over 550,000 new private housing units were built in the State.
Local Authorities may have a number of reasons for declining identified properties, such as location or wider planning and housing policy considerations. A further consideration for Local Authorities, when assessing the suitability of identified houses and apartments, is the requirement to provide for an appropriate mix of housing tenures and to avoid undue housing segregation within individual developments and wider residential areas.
The 4,104 residential properties not taken up for social housing have been either sold or rented in the private housing market by NAMA debtors and receivers and, in that way, continue to form part of the market supply of housing. There were also cases where the related properties were sold or rented by their owners or appointed receivers in the time taken by Local Authorities to assess and confirm demand.
I am advised that there has been extensive engagement between NAMA and the Department of the Environment, Community and Local Government and all the other stakeholders, including the Housing Agency, Local Authorities and Approved Housing Bodies, on this initiative and all parties have worked extremely hard to ensure that properties for which demand has been confirmed are delivered as quickly as possible, notwithstanding the substantial construction and wider compliance work that is required in many cases. Furthermore, NAMA will continue to work with all relevant stakeholders to ensure that the residual units, for which demand has been confirmed by Local Authorities, are delivered in line with local authorities and approved housing bodies entering into contracts to buy or rent the units.
To streamline delivery under this initiative, NAMA established a Special Purpose Company, National Asset Residential Property Services Limited or "NARPS", to purchase suitable properties from NAMA debtors from within the existing NAMA portfolio for onward leasing to local authorities or approved housing bodies on the basis of long-term, commercial, arrangements which include an option to buy. I am advised that NAMA has spent €160m acquiring properties to rent by NARPS to approved housing bodies. NAMA has developed standardised long-term leasing arrangements and attractive lease terms to facilitate this process. NAMA's contribution towards social housing via NARPS is consistent with its commercial remit and is not gifted, or subsidised, in any way.
The issue of social housing is, as the Deputy is aware, directly impacted by the level of housing output generally in the economy. In this regard, I welcome that the NAMA Board has recently announced, following a detailed review of sites securing its loans, that it could be in a position to fund up to 20,000 additional new homes, on a commercial basis, by end-2020. I am advised that approximately 90% of these residential units would be in Dublin and the greater Dublin area, where demand is greatest. NAMA-funded residential developments are subject to the same planning and social housing provisions, including Part V of the Planning and Development Act 2000 (as amended), as all other residential development projects in the State. Therefore, the corresponding Part V contribution of 10% social housing units, over the life of the funding programme, will make a significant contribution to future delivery of social housing.
NAMA has indicated that NARPS could be used in certain cases to facilitate the delivery of future Part V housing on new developments funded by NAMA in circumstances where this is the preferred option of the planning authorities. This would mean that NAMA would bear the up-front capital cost of delivering this Part V housing and that such housing will be delivered on-site, in line with Government policy to ensure greater integration in housing.
83. Deputy Frank O'Rourke asked the Minister for Finance his plans to change the tax system for distressed debt and other financial assets so that speculation on distressed residential debt is penalised rather than rewarded; and if he will make a statement on the matter. [6363/16]
View answerThe Irish tax code does not penalise speculation in distressed residential debt, nor does it reward such speculation: it is neutral as to the intention of the investor.
What should give the Deputy comfort however, is that the transfer of a loan from one entity to another does not change the terms of the contract or the borrower's rights and obligations under the original contract.
As the Deputy will be aware, the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 was enacted on 8 July 2015. This Act introduced a regulatory regime for a new type of entity called a 'credit servicing firm'. Credit Servicing Firms are now subject to the provisions of Irish financial services law that apply to 'regulated financial service providers'. This ensures that relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the various statutory codes such as the Consumer Protection Code, Code of Conduct on Mortgage Arrears, and the Code of Conduct for Business Lending to Small and Medium Enterprises. All consumer and relevant SME loans sold by regulated financial institutions are covered by this Act.
84. Deputy Bernard J. Durkan asked the Minister for Finance the financial assistance he will provide to a person (details supplied) in County Kildare with reference to the purchase of a specifically adapted vehicle; and if he will make a statement on the matter. [6373/16]
View answerThe Disabled Drivers and Disabled Passengers (Tax Concessions) Scheme provides relief from VAT and Vehicle Registration Tax (up to a certain limit) on the purchase of an adapted car for transport of a person with specific severe and permanent physical disabilities, and an exemption from motor tax in respect of that vehicle, and relief on fuel costs (up to a certain limit). As the Deputy is aware, an applicant must have a Primary Medical Certificate to qualify for the scheme. To receive a Primary Medical Certificate, an applicant must be permanently and severely disabled within the terms of the Disabled Drivers and Disabled Passengers (Tax Concessions) Regulations, 1994 (S.I. 353 of 1994) and satisfy one of the following conditions:
- be wholly or almost wholly without the use of both legs;
- be wholly without the use of one leg and almost wholly without the use of the other leg such that the applicant is severely restricted as to movement of the lower limbs;
- be without both hands or without both arms;
- be without one or both legs;
- be wholly or almost wholly without the use of both hands or arms and wholly or almost wholly without the use of one leg;
- have the medical condition of dwarfism and have serious difficulties of movement of the lower limbs.
The Senior Medical Officer for the relevant local Health Service Executive administrative area makes a professional clinical determination as to whether an individual applicant satisfies the medical criteria. A successful applicant is provided with a Primary Medical Certificate, which is required to claim the reliefs provided for in the Regulations. An unsuccessful applicant can appeal the decision of the Senior Medical Officer to the Disabled Drivers Medical Board of Appeal, which makes a new clinical determination in respect of the individual. The Medical Board of Appeal is independent in the exercise of its functions.
The Scheme and qualifying criteria were designed specifically for those with severe physical disabilities and are, therefore, necessarily precise. I regularly receive representations from applicants with a disability who feel they would benefit from the scheme given the nature of their disability and their individual circumstances, but do not meet the qualifying criteria set out in the Regulations. While I have sympathy with these cases, the Scheme represents a significant tax expenditure. Between the Vehicle Registration Tax and VAT foregone, and the assistance with fuel costs used by members of the Scheme, based on provisional figures the Scheme represented a cost of €50.3 million to the Exchequer in 2015, an increase of €1.7 million on the 2014 cost. This figure does not include the revenue foregone to the Local Government Fund in the respect of the relief from Motor Tax provided to members of the Scheme.
I recognise the important role that the Scheme plays in expanding the mobility of citizens with disabilities, and I have managed to maintain the relief at current levels throughout the crisis despite the requirement for significant fiscal consolidation.
Should an applicant satisfy the above medical criteria, they can then apply for VAT and VRT relief, up to certain limits, on the purchase of an adapted vehicle.
85. Deputy Pearse Doherty asked the Minister for Finance the income, gains and associated taxes paid in respect of qualifying investor funds investing in real estate since their introduction; the tax paid by their associated shareholders by year; and if he will make a statement on the matter. [6395/16]
View answer86. Deputy Pearse Doherty asked the Minister for Finance the income, gains and associated taxes paid in respect of Irish collective asset management vehicles investing in real estate since their introduction; the tax paid by their associated shareholders by year; and if he will make a statement on the matter. [6396/16]
View answer87. Deputy Pearse Doherty asked the Minister for Finance if he has considered anti-avoidance measures in respect of Irish collective asset management vehicles investing in real estate, given the recent revelations concerning massive profits being made in property located here and funnelled through these vehicles, resulting in the Exchequer being deprived of corporation tax, income tax and capital gains tax earned on profits from source assets; and if he will make a statement on the matter. [6397/16]
View answer88. Deputy Pearse Doherty asked the Minister for Finance if he has considered anti-avoidance measures in respect of qualifying investor funds investing in real estate, given the recent revelations concerning massive profits being made in property located here and funnelled through these vehicles, resulting in the Exchequer being deprived of corporation tax, income tax and capital gains tax earned on profits from source assets; and if he will make a statement on the matter. [6398/16]
View answerI propose to take Questions Nos. 85 to 88, inclusive, together.
Irish collective asset management vehicles (ICAVs) were introduced in 2015 as a measure to develop and enhance Irish competitiveness in the funds industry in Ireland and to promote employment in the State.
Qualifying Investor Funds, once authorised by the Central Bank, fall under the definition of an "investment undertaking", in Chapter 1A, Part 27 of the Taxes Consolidation Act and so are subject to the provisions of that chapter. The legislation provides a tax exemption to the undertaking itself and to certain investors for example investors not resident in the State.
The Revenue Commissioners have informed me that as such funds are not chargeable to tax in respect of relevant profits they would not have the information sought. Exit tax is imposed on Irish resident unit holders but a breakdown of this specific tax head for a qualifying investor fund is not available.
I am further advised by the Revenue Commissioners that they are currently examining recent media coverage concerning the use of investment funds for property investments. Should these investigations uncover tax avoidance schemes or abuse, which erodes the tax base and causes reputational issues for the State, then appropriate action will be taken and any necessary legislative changes that may be required will be put forward for my consideration.
89. Deputy Pearse Doherty asked the Minister for Finance further to his reply to Parliamentary Question No. 308 of 26 May 2015 to provide the composition of the €480 million of discretionary non-pension deductions and reliefs in tabular form; and if he will make a statement on the matter. [6399/16]
View answerI am informed by the Revenue Commissioners that the table below presents the tax cost (€770m) of the deductions and allowances in question, which are currently allowable for tax at an individual's marginal rate of income tax, the cost were these to be confined to the standard rate (€479m) and the resulting difference or saving to the Exchequer (€291m).
A breakdown of the deductions and allowances is provided in tabular form below for 2012.
|
Tax Relief Provision |
Current Tax Cost (Marginal Rate) 2012 €m |
Estimated Tax Cost (Standard rate) 2012 €m |
Estimated Saving 2012 €m
|
|
Income Tax Capital Allowances |
579.3 |
376.8 |
202.46 |
|
Allowable Expenses |
70.9 |
42.7 |
28.23 |
|
Investment in Films |
58.5 |
28.5 |
29.96 |
|
Donations to Approved Bodies (Income Tax only) |
45.71 |
22.1 |
23.57 |
|
Interest paid: Other |
15.18 |
8.3 |
6.93 |
|
Total (rounded) |
770 |
479 |
291 |
These figures were based on data from 2012 returns, the Deputy may be interested in more up-to-date figures based on data from 2013 returns which are outlined in the table below.
|
Tax Relief Provision |
Current Tax Cost (Marginal Rate) 2013 €m |
Estimated Tax Cost (Standard Rate) 2013 €m |
Estimated Saving 2013 €m |
|
Income Tax Capital Allowances |
546.5 |
376.8 |
169.7 |
|
Allowable Expenses |
70.9 |
43.6 |
27.3 |
|
Donations to Approved Bodies (Income Tax only) |
44.1 |
26.2 |
17.9 |
|
Interest paid: Other |
15.2 |
5.0 |
10.1 |
|
Total |
677 |
452 |
225 |
In relation to film relief, the Deputy will be aware that the Income Tax scheme for investment in film was replaced in January 2015 by a new scheme of Corporation Tax relief to Film Producer Companies. This means that savings in relation to standard rating would not materialise in the context of the new scheme. While this was included in the initial calculation for 2012 in response to the earlier Parliamentary Question (and left in the above figures 2012 for consistency), this is not included in the 2013 figures.
90. Deputy Pearse Doherty asked the Minister for Finance why Corporation Tax receipts are 87% ahead of target in the first three months of 2016; and if he will make a statement on the matter. [6400/16]
View answerThe position is that at end-March 2016, corporation tax receipts were €305 million or 87.3 per cent higher than expected at €654 million. I am advised by the Revenue Commissioners, that the over-performance in the first quarter of 2016, is primarily due to a number of unexpected payments, c. €300 million, from a small number of large multinational companies.
I am further advised by the Revenue Commissioners that they have carried out an initial investigation of these payments. However, due to the rules associated with the payment of preliminary corporation tax, further information will not be available until the various companies file their relevant tax returns or subsequently are in a position to inform Revenue whether these increased payments are one-off in nature, or if they can be considered in line with their final tax expectations for the year.
Finally, I would point out that adjusting for these unexpected payments, corporation tax receipts at end-March 2016, are in line with target.
91. Deputy Clare Daly asked the Minister for Finance his knowledge of the Bank of Ireland's involvement with the US Government's contractors, Dyncorp, organisers of Central Intelligence Agency rendition flights through Iridian Asset Management Limited Liability Company, an indirect wholly-owned subsidiary of the governor and company of the Bank of Ireland in 2009. [6429/16]
View answerIn the first instance, I should highlight that the Deputy's question refers to events that may have taken place in 2009, at a time when I was not Minister for Finance. Notwithstanding this, I can confirm that I have no knowledge of the matter as described by the Deputy.
92. Deputy Thomas P. Broughan asked the Minister for Finance the names of the barristers he appointed to each of the State Claims Agency panels; the fees each barrister received in 2015 and in 2016 to date; and if he will make a statement on the matter. [6451/16]
View answerIn answer to the Deputy's question I wish to state that I have no role in the appointment of barristers to the State Claims Agency's panels. The selection of barristers for such panels is entirely a matter for the SCA itself.
As the Deputy will be aware the NTMA is a statutory body which reports to me in my capacity as Minister for Finance. The NTMA is designated as the State Claims Agency when performing the claims management and risk management functions designated to it under the National Treasury Management Acts.
Also in answer to the Deputy's question I refer to material provided by the State Claims Agency's National Incident Management System (which is attached to this answer).The material provided by the State Claims Agency covers the transaction period 01/01/2015 31/12/2015, and the report is up-to-date as of 11/04/2016. Material relating to the period January to June 2016 will be published on the website of the State Claims Agency in July 2016.
I refer the Deputy to Appendices 1A, 1B, 1C, 1D, 1E, 1F which give a full listing of barristers appointed to the Senior Counsel, Junior B Counsel and Junior C Counsel Panels. The State Claims Agency have outlined that it is important to note that these are the barristers who were appointed to the State Claims Agency panels following the procurement process in January 2014, and the lists do not reflect any barristers who may have left the Bar since then.
93. Deputy Thomas P. Broughan asked the Minister for Finance the amount of VAT he collected from the sale of new residential units in 2015 and in 2016 to date; and if he will make a statement on the matter. [6452/16]
View answerI am advised by the Revenue Commissioners that the information furnished on VAT returns does not require the yield from particular activities or products to be identified, and therefore it is difficult to estimate the VAT yield for the sector mentioned by the Deputy.
However, based on information extrapolated from various data sources, it is estimated that the amount of Value Added Tax collected from completion of new residential units in 2015 is €440 million. This figure includes private housing as well as the provision of social housing. Figures are unavailable at present for 2016 due to the timing of return filings.
94. Deputy Pearse Doherty asked the Minister for Finance if owners of more than one property, which are each subject to the local property tax, may pay all their tax liabilities through the post office network; and if he will make a statement on the matter. [6461/16]
View answerI am advised by Revenue that owners of more than one residential property are required to meet their Local Property Tax (LPT) filing and payment obligations electronically in accordance with Section 44 of the Finance (Local Property Tax) Act 2012 (as amended).
The Act does not provide for such property owners to pay their LPT liabilities through the approved payment service providers, including the post office network.
To facilitate the electronic process, Revenue provides an online service via the Revenue website at www.revenue.ie that is both secure and user friendly.
The service provides a wide range of single and phased payment options including debit/credit cards, Single Debit Authority (SDA), which operates like an electronic cheque, Deduction at Source from salary or pension and Direct Debit.
The service also facilitates multiple property owners in selecting different payment alternatives for each individual property should they choose to do so.
95. Deputy Pearse Doherty asked the Minister for Finance the number of submissions made in respect of the 4th European Union Anti-Money Laundering Directive and Funds Transfer Regulation - Public Consultation on member state discretions, the number which were in favour of a fully public register of beneficial owners, the number which were opposed to this; and if he will make a statement on the matter. [6484/16]
View answerThe Department received nineteen submissions in response to the 4th European Union Anti-Money Laundering Directive and Funds Transfer Regulation - Public Consultation on Member State Discretions.
Of these, there are two submissions that favour full public access to the register of beneficial ownership of corporate and other legal entities. These two submissions support the creation of an appropriate protection regime to allow for certain restrictions to the access to the information where such access would expose the beneficial owner to potential risk of intimidation and other harms as outlined in article 30(9).
There are eight submissions that do not support full public access to the register of beneficial ownership of corporate and other legal entities. Most of these submissions suggest access be limited to only those listed in article 30(5) a, b, c, namely competent authorities and FIUs, obliged entities for the purpose of customer due diligence, and any person or organisation that can demonstrate a legitimate interest.
There are a further two submissions that are not clearly advocating for or against full public access to the register of beneficial ownership of corporate and other legal entities and there are 7 submissions that make no comment on the matter.
As per article 30(5), the Directive is clear that access to information on the beneficial ownership of corporate and other legal entities must be in accordance with data protection rules and may be subject to online registration and to the payment of a fee.
In relation to article 31, the Directive outlines a different level of access to the register of beneficial ownership of trusts that generate tax consequences. In article 31, Member States must ensure timely and unrestricted access by competent authorities and FIUs but Member States can decide whether to allow access to obliged entities for the purpose of customer due diligence.
My officials will continue to consider the submissions along with other relevant Departments and agencies in relation to the transposition of the 4th European Union Anti-Money Laundering Directive and Funds Transfer Regulation.
96. Deputy Mattie McGrath asked the Minister for Finance if he is aware of claims that the Central Bank of Ireland is turning default and judgment mortgages into derivatives and selling them to investment funds at the behest of the European Central Bank; and if he will make a statement on the matter. [6530/16]
View answer106. Deputy Mattie McGrath asked the Minister for Finance his efforts to protect mortgage holders from the activities of vulture funds; if the regulatory protections are sufficiently robust; and if he will make a statement on the matter. [6562/16]
View answerI propose to take Questions Nos. 96 and 106 together.
The Central Bank of Ireland has informed me that it does not securitise or sell assets of regulated financial service providers and it is prevented from commenting on the commercial decisions of regulated financial service providers.
As the Deputy will be aware, the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 was enacted on 8 July 2015.
The 2015 Act introduced a regulatory regime for a new type of entity called a 'credit servicing firm'. Credit Servicing Firms are now subject to the provisions of Irish financial services law that apply to 'regulated financial service providers'. This ensures that relevant borrowers, whose loans are sold to third parties, maintain the same regulatory protections they had prior to the sale, including under the various statutory codes such as the Consumer Protection Code, Code of Conduct on Mortgage Arrears, and the Code of Conduct for Business Lending to Small and Medium Enterprises. All consumer and relevant SME loans sold by regulated financial institutions are covered by this Act.
Furthermore, it is important to highlight that the transfer of a loan from one entity to another does not change the terms of the contract or the borrower's rights and obligations under the original contract.
