Brendan Griffin
Question:179. Deputy Brendan Griffin asked the Minister for Finance his views on a matter (details supplied) regarding dwelling house relief; and if he will make a statement on the matter. [34588/16]
View answerTuesday, 15 November 2016
Questions (179)
Written answers
I have put forward an amendment on the capital acquisitions tax relief known as the dwelling house exemption for the Committee Stage of Finance Bill 2016 which I expect will be discussed by the Committee on Finance, Public Expenditure and Reform, and Taoiseach on Tuesday 10 or Wednesday 16 of November. I consider that this particular relief has lost focus since its introduction because of changes made to how it operates over the years. The purpose of my amendment is to realign the exemption with its original policy objective i.e. to alleviate the hardship of an inheritance tax liability for a person who inherited a house in which he or she had been living with the deceased and to ensure that the person did not have to sell the house to pay the tax liability. The changes I have proposed will have two principal effects.
Firstly, the exemption will only be available for inheritances. With one exception, it will no longer be possible to receive a tax-free gift of a dwelling house. The exception will be where a person gifts a dwelling house to a dependent relative. For this purpose, a dependent relative is a direct relative of the donor, or of the donor's spouse or civil partner, who is permanently and totally incapacitated because of physical or mental infirmity from maintaining himself or herself or who is over the age of 65.
Secondly, the inherited dwelling house must have been the disponer's principal private residence at the date of death. This requirement will be relaxed in situations where the disponer lives elsewhere at the date of death-for example, in a nursing home-because he or she has had to leave the house because of ill health.
If my amendment is accepted by the Oireachtas and enacted in the Finance Bill, it will take effect from the date of enactment. There will not be any provision for transitional arrangements for those people who may have arrange their affairs with the intention of taking advantage of the exemption when the required three-year period of occupation comes to an end. As the provision was originally intended to alleviate hardship it is not my intention to make transitional arrangements to facilitate individuals who intended to make use of it to transfer assets free of capital acquisitions tax.
I am also aware that connected amendments have been proposed by other deputies which are likely to be discussed at Committee Stage.