Section 97A of the Taxes Consolidation Act 1997 provides for a time-limited deduction against rental income for pre-letting expenditure incurred on a residential premises that has been vacant for a year or more. The aim of the measure is to encourage owners of vacant residential property to bring that property into the rental market, for a minimum of four years. The measure is consistent with Government policy as outlined in ‘Housing for All - a New Housing Plan for Ireland’.
I am advised by Revenue that there is no limitation on the number of residential units for which a landlord can make a claim under section 97A TCA. However, the maximum deduction per vacant property permitted under the section is €5,000.
I am further advised by Revenue that the number of claimants, the number of properties declared on tax returns, the amount claimed, and the estimated tax cost associated with claims under section 97A Taxes Consolidation Act 1997 (TCA) are set out in the table below. Returns for 2019 are currently being processed and the data will be available shortly. No information is available at present for 2020 and 2021.
|
Year
|
Number of Taxpayers
|
Number of Properties Declared
|
Amount S97A Claimed €m
|
Tax Cost €m
|
|
2017
|
630
|
1,225
|
1.1
|
0.3
|
|
2018
|
1,030
|
2,115
|
2.4
|
0.7
|
A deduction under section 97A TCA will be clawed back where a landlord who has made a claim under the section stops letting a residential premises within four years of the first letting. This can happen where either the property is sold or the property changes use from a rented residential property.
As the Deputy may be aware, Finance Bill 2021, if passed by the Oireachtas, will extend the period in which pre-letting expenditure can be claimed until 31 December 2024. It is currently scheduled to end on 31 December 2021.
