Written Answers Nos. 262-283
263. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which Ireland’s trading position continues notwithstanding the effects of Brexit; and if he will make a statement on the matter. [62733/21]
View answer266. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he remains satisfied that Ireland’s economy can and will remain competitive throughout the EU and or third countries; if particular economic threats have arisen in recent times not excluding Brexit or Covid-19; and if he will make a statement on the matter. [62736/21]
View answerI propose to take Questions Nos. 263 and 266 together.
The latest figures from the CSO confirm the continued recovery of the domestic economy in the third quarter, as the success of the vaccination programme allowed for the easing of restrictions. Ireland’s external trade has supported the economy throughout the pandemic.
The global economy experienced the shock of the Covid-19 pandemic in a reasonably symmetric way and a strong but uneven recovery is under way. The economies of our major trading partners, including the EU, are expected to rebound significantly this year and next, creating a supportive external environment for Ireland’s trade going forward.
Multinational sector trade proved very resilient during the pandemic, and has continued to experience strong growth in 2021. Indigenous sector trade was more detrimentally affected by the pandemic, but has been recovering in line with strengthening global demand.
Looking to the future, the outlook for Irish indigenous exports is brighter in light of the strengthening global recovery, although Brexit is expected to have an impact on indigenous exports from next year. The Irish modified current account, which strips out the effects of globalisation, is in a strong position and is expected to remain in surplus over the medium term. This reflects the persistence of Ireland’s competitiveness on the international stage, for both indigenous and multinational trade.
Aside from Brexit and Covid-19, risks to Ireland’s external position include supply-side bottlenecks in international goods trade, global inflationary pressures and general macroeconomic risks which threaten the anticipated recovery among our trading partners. As a small open economy, Ireland is particularly exposed global risks and my Department continues to monitor them closely.
264. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which he and his ministerial colleagues throughout the European Union continue to co-ordinate efforts in the fight against Brexit; if extra measures are being considered; and if he will make a statement on the matter. [62734/21]
View answerMy colleagues across the European Union and I remain alert to the challenges and the potential economic impacts arising from Brexit. As one of the most affected Member States by Brexit, I pay particular attention to the effective implementation of the EU-UK Trade and Cooperation Agreement (TCA) and to the Withdrawal Agreement, which includes the Protocol on Ireland and Northern Ireland. Across the EU, solidarity with Ireland in respect of Brexit remains steadfast. The Member States support the Commission's approach in engaging and responding to genuine concerns from people and businesses in Northern Ireland.
As I mentioned in my Budget speech in October, it is important that we continue to prepare for any unforeseen consequences over the coming period. The Government remains focused on protecting our economic and financial interests, and will continue to work to minimise the disruption that Brexit will have on the economy and peoples’ livelihoods to the greatest extent possible.
The Government has dedicated substantial resources to preparing for Brexit and the systems in place are working well. We have invested significantly in new infrastructure, systems and staff, and continue to engage intensively with stakeholders and to provide a range of financial, upskilling and advisory supports for impacted sectors and businesses.
Ireland will be the largest beneficiary from the Brexit Adjustment Reserve (BAR), the aim of which is to provide financial support to the most affected Member States, regions and sectors to deal with the adverse consequences of Brexit. Ireland is to receive €1.165 billion from the BAR, with the first disbursement of funds to be paid before the end of 2021. Funding will be directed at areas such as enterprise supports; supports for the agrifood and fisheries sectors, reskilling and retraining; and checks and controls at our ports and airports.
265. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which inflation continues to be a threat to Ireland and other EU countries; the degree to which he and his EU colleagues can rely on measures to combat the issue; and if he will make a statement on the matter. [62735/21]
View answer271. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he and his EU colleagues have identified the need for particular measures to counter inflation; and if he will make a statement on the matter. [62741/21]
View answerI propose to take Questions Nos. 265 and 271 together.
At both the ECOFIN and Eurogroup meetings, my fellow Ministers and I work alongside the European Commission and the European Central Bank to take stock of the latest economic situation, including inflation developments throughout the EU.
The economic recovery throughout this year has been robust, with recent indicators pointing to strong growth. This momentum reflects our coordinated policy support, successful vaccine rollout and the boost to reforms and investment now that recovery funding has started to flow. Indeed, growth figures for the third quarter show that the euro area is nearly back to pre-pandemic levels of output.
However, the uptick in new cases and emergence of the omicron variant present a downside risk to the economic outlook. In addition, the sharp rebound in global demand and persistent production and transport disruptions has brought elevated rates of inflation.
The latest Eurostat estimates point to euro area annual inflation of 4.9 per cent in November. This was largely driven by energy inflation, which increased to an estimated 27.4 per cent. Pandemic-related effects, such as the impact of temporary VAT reductions, and technical factors, such as measurement issues, added further volatility. HICP inflation reached 5.4 per cent in Ireland in the same period.
The latest figures point to inflation, including energy prices, remaining high over the course of the year, before gradually easing next year. The ECB projects inflation to average 2.2 per cent this year but to decline to rates of 1.7 and 1.5 per cent in 2022 and 2023, respectively. Both the Commission and the ECB are confident that elevated inflation is linked to temporary factors, supply-side constraints and the recovery in demand as our economies reopen.
As the Deputy is aware, the ECB has an independent mandate to maintain price stability, and uses the range of monetary policy instruments to target an inflation rate of 2 per cent over the medium-term. The ECB has stated that the outlook for inflation over the medium-term remains subdued. Core inflation – which strips out energy and non-processed food inflation – was 2.6 per cent in November.
That said, energy prices can entail wide-ranging consequences for inflation and raise costs for businesses and families. In recognition of these potential social impacts, many Member States have introduced targeted measures to protect vulnerable households from energy poverty. In framing Budget 2022, I was conscious of these cost of living pressures and announced a range of measures including targeted social welfare initiatives.
In addition, at an EU level, the Commission has issued a Communication on Tackling Rising Energy Prices, and the matter was discussed at various Council configurations. The Communication emphasises the broad nature of the impact and policy response.
In short, my fellow Finance Ministers and I all agree that this is an important issue and that we need to continue closely monitoring inflation and energy price developments and the potential implications for our economies.
267. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which international increases in taxation with particular reference to the 12.5% corporations profits tax is likely to affect the economy in the future; and if he will make a statement on the matter. [62737/21]
View answer268. Deputy Bernard J. Durkan asked the Minister for Finance if foreign direct investment has been affected one way or another by the change in corporation profits taxes; and if he will make a statement on the matter. [62738/21]
View answerI propose to take Questions Nos. 267 and 268 together.
I take it that your questions relate to Ireland joining the 8 October OECD/G20 Inclusive Framework agreement to address tax challenges arising from the digitalisation of the economy.
There are two pillars to the OECD agreement. Pillar One will see a reallocation of a proportion of profits to the jurisdiction of the consumer. This means that, in effect, corporate tax revenue streams which now flow to the Irish Exchequer will flow to the Exchequers of other countries when implemented.
Pillar Two will see the adoption of a new global minimum effective tax rate of 15 per cent applying to multinational companies (MNEs) with global revenues in excess of €750m.
It is important to recognise that Ireland’s corporation tax rate of 12.5 per cent will remain for the vast majority of Irish businesses. The threshold that will apply to the 15 per cent minimum effective tax rate is €750 million annual global turnover. Thus, the vast majority of companies in Ireland - over 95 per cent - will not be subject to these new rules, and will continue to be subject to corporation tax at a headline rate of 12.5 per cent.
At a superficial level, the application of a minimum tax rate of 15 per cent under Pillar Two could provide some uplift to domestic corporation tax revenues. However, this would be a static assumption which does not take account of how firms react to a new tax regime, or to potential changes in tax regimes in other jurisdictions i.e. changes to the tax base. Further, any uplift on Pillar Two would be countered by the potential cost of Pillar One. That cost remains highly uncertain as its technical implementation is still far from resolved.
My Department and the Revenue Commissioners previously estimated that the cost of the OECD agreement on a new tax framework to address the tax challenges of digitalisation could be up to €2 billion annually when both pillars come into effect. However, as I have stated previously, this is an extremely challenging exercise, both in terms of timing and magnitude. Although there are two pillars to this Agreement, it is important to understand that they are intended as integral parts of a single agreed solution. How they interact and the degree to which this interaction influences business behaviour is very difficult to predict.
It should also be stressed that what we have at the moment is a broad high level agreement on the main features of a solution. Discussions are continuing and will continue into 2022 on how the agreement will be implemented in practice. As technical discussions on the implementation framework continue, officials from my Department and from Revenue will keep the position under review and, when and if necessary, my Department will provide an update on how the agreement is expected to impact the public finances. The Agreement is planned to come into effect from 2023.
An historic agreement such as this presents challenges to all countries, including Ireland. However, I believe that I have safeguarded Ireland's interests and I am confident that Ireland will remain competitive into the future, and we will remain an attractive location and ‘best in class’ when multinationals look to investment locations. My commitment, and that of the Irish Government, remains clear – we will ensure that Ireland’s corporation tax regime will remain competitive, fair and sustainable. Ireland will continue to have an attractive tax offering, and we will keep and continue to create many good jobs.
269. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which this country remains attractive for foreign direct investment; and if he will make a statement on the matter. [62739/21]
View answerSince the onset of the Covid-19 crisis, businesses have been faced with unprecedented challenges and uncertainty. The latest data from the CSO confirms that following a steep decline at the start of 2021, the domestic economy has subsequently made a rapid recovery.
Against the backdrop of the pandemic, inward FDI flows to Ireland still amounted to around one-fifth of GDP in 2020 according to the OECD, the second highest in the EU and significantly higher than the OECD average. Ireland remains internationally recognised as a competitive country. According to IMD, Ireland ranked 13th in its world competitiveness rankings in 2021. With the economic recovery underway, FDI investment will continue to play a crucial role in helping to ensure a strong and sustainable recovery going forward.
Ireland’s FDI performance in recent years has been exceptional and we have built a reputation as a resilient, innovative and stable location to do business. This provides a strong foundation on which Ireland can build upon in coming years.
Despite the disruptions caused by Covid to the global FDI landscape, Ireland remains an attractive prospect for foreign direct investment, as foreign firms recognise Ireland’s unique competitive advantages, namely our talented and flexible workforce, our hard-won reputation as a pro-enterprise jurisdiction, and our successful record as a home for global business.
270. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he and his colleagues throughout the eurozone remain satisfied that the highest possible level of economic activity can continue unimpeded in their respective countries in the eurozone notwithstanding the existence of challenges; and if he will make a statement on the matter. [62740/21]
View answerAt both the ECOFIN and Eurogroup meetings, my fellow Ministers and I work alongside the European Commission and the European Central Bank to take stock of the latest economic situation, including the challenges facing the European economy.
The recovery throughout this year has been robust, with the European economy essentially having regained its pre-pandemic level of output in the third quarter. This momentum reflects the success of our coordinated policy support, the vaccine rollout, the introduction of structural reforms and the recovery funding that is now flowing across Europe.
The European Commission’s Autumn Forecast remains positive about EU growth momentum, though growing headwinds to the economic outlook are signalled. The Commission projects growth of 5.0 per cent this year and 4.3 per cent next year in both the EU and euro area. While the pace of recovery is varying, it is positive to note from the Forecasts that the Commission expects the EU to return to its path of economic convergence.
That said, the recent uptick in cases and the emergence of the Omicron variant present significant downside risks to the outlook. It is imperative that we continue work to understand this variant and respond as quickly as we can to mitigate its impact. However, our vaccination programmes have managed to substantially reduce the link between infections and hospitalisations. This means that any new wave of cases will have a smaller impact on economic activity than during previous waves.
Beyond the evolution of the virus, the economic landscape is also facing other challenges, such as inflation, rising energy prices and supply constraints. We will continue to monitor these issues closely and take action where necessary – as we have done with measures to tackle energy price inflation.
Throughout the pandemic, strong coordinated policy actions at EU and national levels have helped to limit the economic impact of Covid-19 and to support those most affected. We acted to protect incomes, support businesses and invest in our healthcare capacity and vaccination programmes. The stronger than anticipated recovery seen in many European countries this year is testament to the success of these policies.
272. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which the insurance industry here remains competitive when compared with insurance costs throughout the European Union notwithstanding national differences that may apply; and if he will make a statement on the matter. [62789/21]
View answerThe Irish insurance sector is diverse, comprising life, non-life and reinsurance firms providing a range of products and operating across a number of geographic markets. As Minister for Finance, I am responsible for the development of the legal framework governing regulation of this sector. This framework is mainly governed by the EU Solvency II Directive, which provides for three ways in which an insurance undertaking can operate within the Irish market. These are to:
- establish a head office in Ireland (authorised by Central Bank of Ireland);
- establish a branch in Ireland through Freedom of Establishment (FoE); or
- operate on a Freedom of Services basis (FoS), i.e. conduct business in Ireland from another country.
It should be noted that companies operate within each of these channels in the Irish insurance market, in addition to Irish companies operating across the EU on a similar basis. The Solvency II framework is designed to allow for a level playing field across the European Union for insurers, not only in terms of market access, but also with regard to the level of supervision and regulation. It also expressly prohibits Member States from adopting rules that require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products.
I understand from my officials that it is difficult to obtain reliable data to compare the cost of insurance here to that in other jurisdictions throughout Europe. I am informed that international organisations, such as the OECD and Eurostat, do not publish comparative data on the cost of insurance between countries. Eurostat publishes Harmonised Index of Consumer Prices (HICP) data with regard to insurance, but this only provides a comparison of the level of inflation for different types of insurance such as motor and travel insurance. It is not possible to compare the underlying cost of each insurance type. In addition, this does not include a comparative index for the price of insurance to businesses.
In any event, any international comparisons based on price alone would not take into account relevant factors such as the various regulatory environments and liability systems in place in different jurisdictions. However, increased availability of data in relation to insurance and understanding the factors that influence or drive the cost of it are important. In Ireland, we have the National Claims Information Database (NCID), which is unique in Europe in terms of the transparency it provides into the insurance sector, including claims costs and average earned premium data. The Central Bank of Ireland has published three NCID reports on private motor insurance and one NCID report on employer liability, public liability and commercial property insurance to date. The Central Bank of Ireland will continue to publish regular reports that will provide us with a wealth of data in terms of how insurance costs are affecting different groups. The Government has also proposed for further enhancements to be made to the NCID in the new Insurance (Miscellaneous Provisions) Bill, to further increase transparency in the sector. The Heads of that Bill are currently going through the pre-legislative scrutiny process.
With regard to the competitiveness of the Irish insurance sector more generally, I believe that the implementation of the outstanding Action Plan for Insurance Reform elements will have a positive impact. In July, the Cabinet Committee Insurance Reform Sub-Group published the first six-monthly Implementation Report of the Action Plan. This showed that work is progressing well to implement these important reforms, with 34 of the 66 actions completed. Work remains ongoing across Government to deliver further elements of the Action Plan, including measures to reform the PIAB, reduce fraud, and make changes to the duty of care. The implementation of these key actions in particular are anticipated to have a positive impact on the affordability and availability of insurance for individuals, businesses, community and voluntary groups across Ireland.
273. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which interest rates charged to home borrowers here are in accord with those applicable throughout Europe having particular regard to the need to ensure that the benefits of the Single Market remain available to all in the European Union; and if he will make a statement on the matter. [62790/21]
View answerI am aware that the general level of new lending interest rates in Ireland are higher than is the case in many other European countries, though it should also be noted that recent trends indicate that certain mortgage rates have been falling in Ireland. For example, the interest rates on new mortgages (excluding renegotiations) have fallen from 4.05% in December 2014 to 2.73% in October 2021. There has also been a reduction in the interest rates charged on loans to SMEs and consumers over the same period.
However, Irish mortgage and other loans can have different characteristics from those offered in other countries. For example, many Irish banks include incentives such as cash back offers, which reduce the effective Irish mortgage interest rate. Also Irish mortgages are generally not subject to upfront fees which are typically charged by banks in some other EU jurisdictions.
There are also a number of important factors which will likely influence the interest rates charged on Irish mortgages. These include operational costs, certain structural factors as referenced above (such as incentives offered), as well as the fact that pricing will reflect:
- credit risk and capital requirements which in Ireland are elevated due to historical loss experience;
- the level of non-performing loans which is higher in Ireland relative to other European banks (as provisioning and capital requirements are higher for these loans to reflect their higher risk and this in turn results in higher credit and capital costs for the Irish banks);
- higher cost-to-income ratios which has been a characteristic of the Irish banking sector in recent years;
- lower levels of competition in the Irish banking market compared to other jurisdictions (however, it is noted that non-bank lenders are now playing a greater role in the provision of new mortgage credit and are offering long term fixed rate mortgages at competitive interest rates).
Nevertheless, the Central Bank has a range of measures to protect consumers who are taking out a mortgage. The consumer protection framework requires lenders to be transparent and fair in all their dealings with borrowers and that borrowers are protected from the beginning to the end of the mortgage life cycle; through protections at the initial marketing/advertising stage, in assessing the affordability and suitability of the mortgage and at a time when borrowers may find themselves in financial difficulties. In particular, the Central Bank introduced a number of increased protections for variable rate mortgage holders which came into effect in 2017. The enhanced measures, which are provided for in an Addendum to the Consumer Protection Code 2012, require lenders to explain to borrowers how their variable interest rates have been set, including in the event of an increase. The measures also improve the level of information required to be provided to borrowers on variable rates about other mortgage products their lender provides which could provide savings for the borrower and signpost the borrower to the CCPC’s mortgage switching tool.
The Central Bank also introduced additional changes to the Consumer Protection Code in 2019 to help consumers make savings on their mortgage repayments, provide additional protections to consumers who are eligible to switch, and facilitate mortgage switching through enhancing the transparency of the mortgage framework. Consumers can reduce average pricing in the mortgage market by availing of switching options to ensure that recent and potential future price reductions through increased competition pass through to the greatest number of customers possible. Indeed a Central Bank study estimated that three in every five ‘eligible’ mortgages for principal dwelling homes stand to save over €1,000 within the first year if they switch and €10,000 over the remain term.
Ultimately, however, the price lenders charge for their loans is a commercial matter for individual lenders. As Minister for Finance I cannot determine the lending policies of individual banks including the interest rates they charge for loans including mortgages.
Nevertheless, I appreciate that greater sustainable competition in the credit market will be of benefit to consumers and other borrowers. Accordingly, the review of the retail banking market which is now underway in my Department will consider how the banking system can best support economic activity, assess competition and consumer choice in the market for banking services and look at options to further develop the mortgage market.
274. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he expects credit to remain available to small and medium sized enterprises; and if he will make a statement on the matter. [62791/21]
View answerAs Minister for Finance, one of my main concerns is to ensure that SMEs have access to sufficient liquidity, and that access to credit for SMEs is maintained. My Department commissions a survey biannually to monitor SME credit levels which are published on www.Gov.ie. Furthermore, since the onset of COVID-19 restrictions the Government has introduced a range of measures to assist companies and to ensure that they have access to sufficient liquidity. This include loan schemes available through the SBCI, which support the provision of appropriately priced, flexible funding to Irish SMEs.
SME borrowers who are applying for, or have accessed, credit continue to have regulatory protections via the Central Bank's SME lending regulations. The SME Regulations, which are available at centralbank.ie/news/article/regulations-for-firms-lending-to-smes-from-2016 set out the required treatment of SMEs by regulated entities in relation to various aspects of business lending. This includes detailed provisions around the credit application process, requirements regarding security or collateral, credit refusals and withdrawals, handling complaints, managing arrears and having in place policies for engaging with SMEs in financial difficulty. The options could include additional flexibility, and this could be a short-term arrangement such as additional periods without payments or interest-only repayments, or if appropriate more long term arrangements.
In addition, the Credit Review Office was established to assist those SMEs and farm borrowers that have had credit applications of up to €3 million refused or indeed an existing credit facility withdrawn or amended by the participating bank. SMEs can apply to Credit Review Office after exhausting the internal appeals process in the participating institution, which are currently AIB, BOI, Ulster Bank and Permanent TSB. Further information is available at www.creditreview.ie
I will continue to work to ensure that access to credit for SMEs is maintained. I also continue to work with the Central Bank, as regulator, to ensure that the relevant Central Bank protections and other applicable frameworks will be fully available to borrowers.
275. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he can encourage consumer spending in a direction that is most beneficial to Ireland’s economy; and if he will make a statement on the matter. [62792/21]
View answerDevelopments in domestic economic conditions over the pandemic period closely tracked the introduction and relaxation of public health restrictions and are clearly seen in the volatile pattern of consumer spending. While the relationship between consumer spending and the stringency of restrictions has weakened over time, the two variables remain strongly correlated, with the re-introduction of restrictions in the first quarter of this year resulting in a 5½ per cent decline in consumer spending.
However, consumer spending rebounded sharply as the economy re-opened over the course of the second quarter, growing by 14½ per cent on a quarterly basis. This recovery of spending continued in the third quarter, albeit at a more moderate pace. Spending growth of ½ per cent on the quarter was surprisingly soft particularly given that additional contact-intensive services sectors re-opened, the ongoing strength of VAT receipts and the recovery in employment and wages. Nevertheless, consumer spending remains around 1 per cent below the pre-pandemic level despite standing at almost 15 per cent below that level in the first quarter this year.
This rapid recovery in consumer spending was supported by the protection of household incomes throughout the pandemic through the provision of government supports in the form of the Pandemic Unemployment Payment and the Employment Wage Subsidy Scheme. This support to household balance sheets and in-turn to consumer confidence has helped to minimise “scarring effects” of the crisis, a key overarching policy objective. In addition, the Government has continued to provide support to the sectors worst affected by the pandemic, including the reduced VAT rate for the hospitality sector until end-August 2022.
Looking ahead, early indications point toward a continued moderation of consumer spending growth in the fourth quarter, with the recovery expected to continue into next year. This recovery in consumption will be underpinned by a normalisation of household savings following the record increase in savings built up since the start of the pandemic. However, we must be cognisant that if an excessive amount of savings flow into areas where demand is already strong and supply is already under pressure, it could add to current inflationary pressures. In light of these risks, my Department will continue to monitor incoming data very closely over the coming months and act as appropriate.
276. Deputy Brendan Griffin asked the Minister for Finance if he will reconsider a previous proposal by this Deputy to eliminate capital gains tax for a two-year window for sellers selling homes, sites and currently uninhabitable properties to first-time buyers as a measure to bring more properties onto the market and give the first-time buyer a more competitive edge in that market versus investors; and if he will make a statement on the matter. [62925/21]
View answerAs the outset the Deputy should note that as per my previous replies, I have no plans to make any changes to the CGT rate in the way suggested by him.. However, he should be aware that all taxes are subject to ongoing review which includes the consideration and assessment of rates along with any associated reliefs and exemptions. Tax policy in relation to CGT is reviewed by the Tax Strategy Group as part of the annual Budget and Finance Bill process and considered in the wider tax policy context.
The Government has undertaken a number of initiatives to help first time buyers .
Earlier this year the Government brought in a 10% stamp levy on institutional investors purchasing in excess of 10 houses in any 12 month period, in response to large numbers of houses bring purchased by funds before they could go on the open market. This measure was complemented by guidelines introduced by the Minister for Housing, Local Government and Heritage under section 28 of the Planning and Development Act 2000 titled Regulation of Commercial Institutional Investment in Housing.
Secondly, the Government launched the comprehensive "Housing for All" strategy. "Housing for All" is intended to deliver more homes of all types for people with different housing needs and this government has allocated a record amount of funding for housing under the strategy.
In addition to the above, as outlined in my response to the Deputy of 24 March 2021, there are existing reliefs that are already available to property owners selling their home and to first-time buyers. They are as set out below.
Help to Buy Scheme
The Help to Buy incentive is a scheme that is targeted at first time purchasers and assists them with a deposit to buy or build a new house or apartment. The incentive gives a refund on Income Tax and Deposit Interest Retention Tax (DIRT) paid in the State over the previous four years, subject to certain limits set out in section 477C Taxes Consolidation Act 1997.
In August 2020, an enhancement to the Help To Buy scheme was made as part of the July Stimulus package, which was later extended in Finance Act 2020. In summary, where a first-time purchaser
(i) enters into a contract for the purchase of a new home, or
(ii) makes the first draw down of the mortgage in the case of a self-build;
during the period 23 July 2020 and 31 December 2021, they can avail of increased relief under Help to Buy scheme, based on the lesser of:
- €30,000 (increased from €20,000),
- 10 per cent (increased from 5 per cent) of the purchase price of a new home or the completion value of the property in the case of self builds, or,
- the amount of Income Tax and DIRT paid in the four years prior to making the application.
This is subject to the person meeting a number of conditions set out in the legislation. Further guidance on the Help To Buy scheme is available on the Revenue website at: revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-46.pdf
To date, the Help to Buy scheme has helped individuals and couples buy or build more than 28,000 homes. These enhanced arrangements were initially extended until the end of 2021 and, subsequently, in my Budget 2022 address, I announced an extension for a further year until the end of 2022. The intention is that the HTB extension will allow time for other Housing for All measures with similar policy objectives to be put in place in the period ahead.
In that speech I also announced that a formal review of the HTB scheme would take place in 2022. It is the intention that the review will be fundamental in nature, and that it will inform decisions for Budget 2023 and Finance Bill 2022.
Capital Gains Tax
Capital gains tax (CGT) is chargeable on any gain arising on the disposal of an asset at the rate of 33%. The first €1,270 of chargeable gains of an individual in any year are exempt from CGT. Where certain conditions are met, a person may be able to avail of relief from CGT in respect of a gain arising on the disposal of a property. These include the following:
(i) If the property was occupied by an individual as his or her principal private residence for all or part of his or her period of ownership, then full or partial relief from CGT will be available where a chargeable gain arises on the disposal of that property. The last 12 months of ownership of the house by the individual is treated as a period of occupation for this purpose.
(ii) If the property was acquired between 7 December 2011 and 31 December 2014, then full or partial relief from CGT will be available where a chargeable gain arises. Full relief will apply if the property has been owned by an individual for a period of 7 years. Where the property has been owned by an individual for a period of more than 7 years, relief is given on the gain in the proportion that the period of 7 years bears to the period of ownership. For example, if the property was owned for 8 years, relief will be given on 7/8ths of the gain. Where the property is held for at least 4 years and less than 7 years, any gain will not be liable to CGT where the disposal is made on or after 1 January 2018.
To be eligible for principal private residence relief and the relief for property acquired between 7 December 2011 and 31 December 2014, a person is not required to dispose of a property to a buyer within a particular category.
(iii) In addition, CGT will not be payable on the disposal of a site from a parent to a child, where the child builds their principal private residence on the site. To qualify for this relief, the site in question must be one acre or less and have a value of €500,000 or less. A clawback of the relief may arise if the child fails to build a house on the site or does not occupy a house built on the site as their only or main residence for at least three years.
Guidelines on the reliefs outlined above are available on the Revenue website at: www.revenue.ie/en/gains-gifts-and-inheritance/cgt-reliefs/index.aspx
277. Deputy Thomas Gould asked the Minister for Public Expenditure and Reform the status of the proposed front-line worker bonus. [62517/21]
View answerThe Government acknowledges the contribution of our front-line healthcare workers and all workers across the economy during the COVID-19 pandemic.
Working together has been a key element of the Government’s approach to the pandemic to date, and this should form part of any approach to recognition.
The pandemic remains an ongoing challenge for us all. It has required our full focus and attention to date in order to continue to provide essential services to the public, including the vaccination rollout programme. However, the Government is committed to looking at this complex issue.
It is important that we consider the whole of the economy in our deliberations on this matter. In addition to the breadth of recognition, the timing and service delivery impact of any approach must be taken into account. These matters are under consideration.
278. Deputy Holly Cairns asked the Minister for Public Expenditure and Reform the number of State boards under the remit of his Department or its agencies, in tabular form; the number of members of each board; the number of persons with a declared disability on each board; and the percentage of each board that is made up of persons with a declared disability. [62531/21]
View answerEnhanced diversity on State Boards is a long standing commitment of Government and is also important in terms of enhancing the effectiveness of State Boards. I am strongly committed to building on the progress made in recent years in this regard.
The Deputy may be aware that in September 2020 I published an Annex to the Code of Practice for the Governance of State Bodies. The Annex deals with Gender Balance, Diversity and Inclusion. Provisions included in this Annex are specifically aimed at improving diversity on State Boards such as reducing the Board terms and facilitating greater turnover of Board members.
Most importantly, each Board should carry out an annual self-assessment evaluation and this process should incorporate a detailed analysis and critical assessment of the gender, diversity and skills mix within the Board.
The information requested by the Deputy regarding the State Boards under the remit of my Department and the bodies under the aegis of my Department is set out as follows. The Deputy should note that the declaration of a disability is voluntary and no Board members have provided such a disclosure.
|
Board |
Number of Board Members |
Number of Board Members with a declared disability |
|
Data Governance Board |
12 |
0** |
|
Bodies under the aegis |
||
|
Public Appointments Service |
8* |
0** |
|
National Shared Services Office |
9 |
0** |
* The PAS Board has nine members when fully constituted.
** The declaration of a disability is voluntary and no Board members have provided such a disclosure.
279. Deputy Ged Nash asked the Minister for Public Expenditure and Reform the number of applications made by Departments for data-sharing purposes under the Data Sharing and Governance Act 2019; and if he will make a statement on the matter. [62571/21]
View answerAs the Deputy is aware, the first parts of the Data Sharing and Governance Act were commenced in 2019 and additional sections have commenced recently.
The Act is changing how Public Bodies share data and requires a comprehensive data sharing and governance framework. The guidance on new procedures have now been published and these will support Public Bodies to share personal data in a transparent and governed way under the new legislation.
There haven't been any applications made to the Data Governance Board thus far. However, the first applications are expected in Q1 next year .
280. Deputy Ged Nash asked the Minister for Public Expenditure and Reform the number of meetings held by the Data Governance Board in 2021; and if he will make a statement on the matter. [62572/21]
View answerAs the Deputy is aware I announced the formation of the Data Governance Board in July of this year and since then the Board has met on 3 occasions.
281. Deputy Ged Nash asked the Minister for Public Expenditure and Reform the number of staff in the Office of the Government Chief Information Officer; and if he will make a statement on the matter. [62573/21]
View answerI wish to inform the Deputy that there are 74 civil servants (FTE 72.55) currently employed in the Office of the Government Chief Information Officer (OGCIO).
282. Deputy Ged Nash asked the Minister for Public Expenditure and Reform the progress made on the personal access data portal as per Part 8 of the Data Sharing and Governance Act 2019; and if he will make a statement on the matter. [62574/21]
View answerI am happy to advise that the Office of the Chief Information Officer has been working on the personal access data portal and has completed the prototyping phase of the project. The next phase of the project will involve a Proof of Concept and this work will begin in 2022.
283. Deputy Ged Nash asked the Minister for Public Expenditure and Reform the implications for the roll-out of online public services arising from the recent settlement between the Data Protection Commissioner and the Minister for Social Protection on proceedings relating to the public services card; and if he will make a statement on the matter. [62575/21]
View answerI was pleased to be informed that an agreement had been reached between the Department of Social Protection and the Data Protection Commission on the processing of personal data in relation to SAFE registration and the Public Services Card (PSC).
The Agreement acknowledges and accepts that the Department and other specified bodies can continue to use MyGovID as the sole means of authenticating identity for the purpose of accessing online services, provided that an alternative service channel is made available.
The MyGovID service is proving to be extremely popular with Ireland one of the fastest growing countries in the world in terms of uptake and usage. The growth in usage and services available will now be able to continue.
