Dáil Éireann Debate, Tuesday - 17 May 2016
212. Deputy Thomas Pringle asked the Minister for Finance the cost of introducing an exemption from property tax for those on incomes below €14,000 per year; and if he will make a statement on the matter. [10352/16]
View answerI am advised that the 2012 report of the interdepartmental group (chaired by Dr Don Thornhill) on the design of a Local Property Tax (LPT) considered the issue of introducing an exemption or waiver for those below a certain income threshold. However, the report concluded that income-related waivers are an inefficient and costly method of targeting relief as they run the risk of creating inequities between property owners in broadly comparable financial situations. As noted in the group's report, there would also be substantial administrative difficulties in determining exactly which categories of property owners should qualify for an income based exemption or waiver.
Instead it was decided to implement a system of deferral of LPT for persons below a certain income threshold. There are number of criteria that must be met to qualify for such a deferral but in the main the income of the individual must be below €15,000 for a full deferral and below €25,000 for a partial deferral (€25,000 and €35,000 thresholds apply for couples). It should be noted that the deferral option attaches as a charge on the property until paid and also carries an annual interest charge of 4%. I am advised by the Revenue Commissioners that approximately 29,000 property owners availed of this deferral in respect of 2015 liabilities.
The thresholds applicable for the income deferral were recommended by the Thornhill interdepartmental group report based on analysis by the ESRI. These were considered appropriate, having regard to potential impacts on households and to the need for balance and equity in terms of the burden thereby imposed on those with higher (but still average or below average) incomes and the levels of social welfare payments.
I am further advised by the Revenue Commissioners that it is not possible at present to accurately estimate the cost of replacing the deferral with an exemption for all property owners with income below €14,000. This is due to the wide ranging nature of property owners with low incomes. Some will be in employment or self-employment (and paying Income Tax), others will be individuals or businesses with no net liability to tax (and therefore not filing detailed tax returns with Revenue) and there will be a significant cohort of individuals, about whom Revenue data are very limited, for example property owners in receipt of only social welfare payments. There may also be foreign owners of Irish property for which income data are not available. Because complete information on the incomes of certain groups of property owners is not available to Revenue, the cost of an exemption for owners with incomes below €14,000 cannot be estimated at present.
