Written Answers Nos. 194-208
195. Deputy Colm Burke asked the Minister for Finance if he will give due consideration for the provision of a VAT rebate on tools, materials and electricity for all Men's Sheds; and if he will make a statement on the matter. [33657/23]
View answerUnder the EU VAT Directive, with which Irish VAT legislation must comply, it is not possible to provide a VAT rebate on tools, materials and electricity for all Mens Sheds.
196. Deputy Cormac Devlin asked the Minister for Finance to detail the oldest complaints the Financial Services and Pensions Ombudsman has under formal investigation; the average wait time for a customer when their complaint is referred to the formal investigation process to a decision; if the Ombudsman has sought any additional resources if the wait time is greater than 12 months; and if he will make a statement on the matter. [33677/23]
View answerThe Financial Services and Pensions Ombudsman (FSPO) is independent in the performance of their statutory functions. As Minster for Finance, I do not have a role in the day-to-day workings of the FSPO’s office and I am not involved in the investigation or decision-making processes of the FSPO.
The Financial Services and Pensions Ombudsman (FSPO) is the statutory body established to resolve complaints from consumers, including non-personal customers, businesses and other organisations, about the conduct of regulated financial service providers and pension providers. Complaints brought to the FSPO are examined on their own merit, and can vary in terms of their complexity.
I am advised by the FSPO that it received 4,781 complaints in 2022 and 4,647 complaints were closed. During 2022, over 80% of complaints that closed were closed within 12 months of the complaint being made, mainly through the Registration and Assessment or Dispute Resolution (mediation) processes.
For all complaints that closed in 2022, including both tracker mortgage complaints and other complaints, the average time from receipt of complaint to closure, was 10 months. For non-tracker mortgage complaints that closed in 2022, the average time from receipt to closure, was 8 months. For tracker mortgage complaints that closed in 2022, the average time from receipt to closure, has been significantly longer. The average time to closure for tracker mortgage complaints which closed in 2022, was 3 years and 4 months.
With regard to the oldest complaints on hand with the FSPO, I am advised by the FSPO that these are within the FSPO’s formal investigation or legal review processes. There are 12 complaints on hand that were originally submitted between 2011 and 2014.
There are a number of reasons that some complaints may take a very long time to resolve. By way of example, some of the reasons that contribute to the timeline for such complaints include:
• Any complaint file that was previously closed, and was subsequently re-opened, will have its age calculated from the date it was originally opened, without reference to the period of sometimes years, during which it may have been closed. A file may reopen for a variety of reasons, including a request from a complainant for the FSPO to reconsider its jurisdiction, because of the change in statutory time limits.
• The need to place complaints on hold for a period, because of litigation which has not yet concluded, where it is appropriate to pause the investigation of certain other complaints, because the outcome is likely to have an impact on those other complaints.
• The need to place complaints on hold for a period, at the request of the complainant. This may be for a number of reasons, including reasons of personal circumstance or their wish to seek independent legal or financial advice prior to proceeding in our process, or the need to procure the consent/signature of a joint owner of the account or policy.
• An example of where a large number of complaints were placed on hold related to the Tracker Mortgage Examination (TME), directed by the Central Bank of Ireland in 2015. This led to the placing on hold by the FSOB/FSPO, of large numbers of tracker mortgage complaint investigations pending the outcome of the TME. This is because the view was taken that the best way of ensuring that this Office had all the necessary information to deal with these complaints, was to await the outcome of the TME and confirmation of the impact, if any, of the Examination on such mortgage loan accounts
Other factors that can have a significant impact on timelines include the volume of ongoing submissions from the parties addressing the evidence under consideration during a complaint investigation or the requirement for a formal jurisdictional determination, separate from the investigation of the merits of the complaint made, for instance, if the time limits are at issue, or are challenged by one of the parties.
Finally, in relation to resourcing, the FSPO advises that its resourcing levels and allocation are kept under constant review. As with many State agencies, recruitment is an ongoing priority and while recruitment and retention is currently more challenging than in previous periods, I am informed that as of March 2023 a total of 13 posts had been filled in the year to date.
197. Deputy Pearse Doherty asked the Minister for Finance if both a timeline and more information can be provided for the new transport scheme for disabled people, which he mentioned in Dáil Éireann on 22 June 2023; and if he will make a statement on the matter. [33834/23]
View answerThe Department of the Taoiseach has convened a Senior Officials Group to discuss progression of the proposals of the NDIS TWG final report. A first meeting was held on 3rd July 2023. My officials will engage and actively contribute to discussions. However, it will be a matter for the SOG and for Government to determine any timelines or next steps as may be decided.
As background, the National Disability Inclusion Strategy Transport Working Group (NDIS TWG), comprising members from a range of Departments, agencies and Disabled Persons Organisations, was tasked under Action 104 to review all Government-funded transport and mobility supports for those with a disability, including the Disabled Drivers and Disabled Passengers Scheme (DDS). The NDIS TWG final report was published on 24th February 2023 and welcomed the proposal put forward by my Department that the DDS should be replaced with a needs-based, grant-aided vehicular adaptation scheme, i.e. to provide direct financial assistance to individuals needing vehicle adaptations according to their needs, to meet their personal transport requirements and ultimately to facilitate independence and participation in society.
The NDIS TWG final report also noted both the outdated approach of the Disabled Drivers and Disabled Passengers Scheme and the fact that the scheme needed to be addressed as a matter of priority. The Working Group agreed that proposals in this regard was a clear deliverable on which work could begin in the relatively near future.
198. Deputy Matt Shanahan asked the Minister for Finance if he intends increasing the income tax exemption of €36,000 for a married couple over 65 years of age (details supplied) ( €18,000 single person), given the proposed increase in the old age pension will push many retired people over the exemption limit; and if he will make a statement on the matter. [33848/23]
View answerThe position is that the age exemption applies for any year of assessment where an individual is aged 65 years or over and his or her total income does not exceed €18,000 per annum. Where an individual is a married person or civil partner and is jointly assessed to tax, the age exemption will apply where either individual is aged 65 or over and where the couple’s total income does not exceed €36,000 per annum. The relevant income thresholds may be increased further if the individual has a qualifying child. The thresholds are increased by €575 in respect of both the first and second child, and €830 in respect of each subsequent child.
It is important to note that marginal relief may be available where the individual’s or couple’s income exceeds the relevant exemption limit but is less than twice that amount. Where marginal relief applies the individual or couple is taxed at 40 per cent on all income above the exemption limit to a ceiling of twice the exemption limit. The system of marginal relief ensures that in cases where an individual's or couple’s income rises above the exemption threshold that their net income will not decline. As the 40 per cent income tax rate only applies to the proportion of income above the threshold. Once the income exceeds twice the exemption limit marginal relief is no longer available and the individual pays tax under the normal tax system.
It should be noted, however, that where the individual’s income is greater than the exemption limit but below twice that limit, the taxpayer is always given the benefit of the more favourable treatment as between the use of marginal relief or the normal tax system of credits and bands.
It is also important point out that the current tax arrangements for persons aged 65 or older compare favourably with the tax treatment of the generality of taxpayers. For example, persons aged 65 or over may also avail of the age tax credit, which currently amounts to €245 per year for single persons or €490 per year for married couples or civil partners. Reduced rates of USC also apply for persons aged 70 or older where their total income is €60,000 or less. Furthermore, the State Contributory Pension and the State Non-Contributory Pension are not chargeable to USC or Pay Related Social Insurance.
It should be noted that the recent Commission on Taxation and Welfare recommended that age should be removed as a factor for determining the charge to income tax and USC. The report stated that the determination of an individual’s tax treatment based on age narrows the base and breaches the concept of horizontal equity, whereby those with similar income should pay the same proportion of that income in taxes. It also breaches the concept of intergenerational equity. Further details are set out in the Report of the Commission, located at the following link - www.gov.ie/en/publication/7fbeb-report-of-the-commission/.
My Department is currently undertaking a review of the personal tax system, which will take account of the Commission on Taxation and Welfare recommendations and other personal tax matters.
199. Deputy Richard Bruton asked the Minister for Finance whether the Tax Strategy Group is looking at any particular issues in respect of the structure of USC and of income tax; and if he will make a statement on the matter. [33867/23]
View answerAs the Deputy will be aware, the Tax Strategy Group (TSG) is in place since the early 1990s and is chaired by the Department of Finance with membership comprising senior officials and political advisers from a number of Civil Service Departments and Offices.
Papers on various options for tax policy changes are prepared annually by Department of Finance officials. The TSG is not a decision making body and the papers produced by the Department are simply a list of options and issues to be considered in the Budgetary process.
The TSG meeting was held last week and the papers will be published in due course, as is the normal practice.
200. Deputy Michael Ring asked the Minister for Finance to compare the tax treatment of the following persons: a car salesman who has the use of a car from their employer; a company representative who is supplied with a vehicle to do their work; an employee who receives a 'car allowance' with their salary; a 'brand ambassador' who has a new car supplied for their personal use; and if he will make a statement on the matter. [33998/23]
View answerI am advised by Revenue that the tax treatment in the scenarios presented depends on a number of factors, including:
• the employment status of the individual;
• the nature of the benefit received; and
• the circumstances under which the benefit is given.
Employer provided car
Section 121 of the Taxes Consolidation Act (TCA) 1997 provides that where a car is made available for the private use of an employee then the employee is chargeable to benefit in kind tax (BIK).
Where such a benefit is provided for an employee by his or her employer, the employer is required to include that notional payment as part of the employee’s emoluments and to deduct tax via the PAYE system accordingly.
From 1 January 2023 the amount taxable as a BIK is determined by the car’s original market value (OMV), the annual business kilometres driven and the CO2 emissions category of the car. The latter determines whether a standard, discounted, or surcharged rate applies. In addition, the Deputy should note that Finance Act 2023 introduced a temporary measure for the year of assessment 2023, which provides for a €10,000 reduction to be applied to the OMV of cars in Category A, B, C and D for 2023 (it does not apply to cars in Category E).
The cash equivalent of the use of an employer-provided car will be determined using the formula:
Original market value (OMV) x A
To calculate A:
1. Determine the applicable vehicle category from Table B based on the amount of CO2 g/km the vehicle produces.
2. Locate the vehicle category in Table A.
3. Compare the annual business mileage travelled for the year to establish the appropriate percentage to use for A.
TABLE A
|
Business mileage |
Vehicle Categories |
|||||
|
lower limit(1) |
Upper limit(2) |
A(3) |
B(4) |
C(5) |
D(6) |
E(7) |
|
kilometres |
kilometres |
Per cent |
Per cent |
Per cent |
Per cent |
Per cent |
|
-- |
26,000 |
22.5 |
26.25 |
30 |
33.75 |
37.5 |
|
26,001 |
39,000 |
18 |
21 |
24 |
27 |
30 |
|
39,001 |
52,000 |
13.5 |
15.75 |
18 |
20.25 |
22.5 |
|
*52,001 |
-- |
9 |
10.5 |
12 |
13.5 |
15 |
*For the 2023 year of assessment only, the upper limit in the highest mileage band is entered into at 48,001km.
TABLE B
|
Vehicle Category(1) |
CO2 Emissions (CO2 g/km)(2) |
|
A |
0g/km up to and including 59g/km |
|
B |
More than 59g/km up to and including 99g/km |
|
C |
More than 99g/km up to and including 139g/km |
|
D |
More than 139g/km up to and including 179g/km |
|
E |
More than 179g/km |
Reduced BIK for Electric cars
Electric cars that fall into ‘Category A’ vehicles i.e. vehicles with CO2 emissions between 0g/km and 59g/km inclusive will benefit from a reduced BIK charge, with rates ranging from 9% to 22.5% depending on business mileage.
For an electric car made available for an employee’s private use during the years 2023 to 2025, the cash equivalent will be calculated based on the actual OMV of the car reduced by:
• €35,000 in respect of cars made available in the 2023 year of assessment;
• €20,000 in respect of cars made available in the 2024 year of assessment; and
• €10,000 in respect of cars made available in the 2025 year of assessment.
Electric cars also benefit from the temporary measure for the year of assessment 2023, which provides for a further €10,000 reduction to be applied to the OMV of cars in Category A, B, C and D for 2023.
If the reduction reduces the OMV to nil, a BIK charge will not arise. Any portion of OMV remaining, after the reduction is applied, is chargeable to BIK at the prescribed rates.
Employees in the motor industry
Employees in the motor industry generally have the use of several different cars, both new and old, during the tax year. To deal with the frequent changes for employees within the motor industry, for BIK purposes, there is a simplification arrangement that may be availed of.
This simplification arrangement provides that the BIK in such cases may be calculated using agreed average OMV of the cars used, rather than the actual OMV. The agreed average OMV to be used when calculating the BIK on the use of the car is determined by reference to the highest value of the vehicles that the employee normally drives, and the average OMV band for the section of the motor industry within which the individual is employed. There are 8 average OMV Bands which are further divided depending on which sector of the motor industry the individual is employed in.
It should be noted that an employee may choose to have the BIK calculated on the statutory basis of the actual OMV of the car made available to him or her during the tax year.
Cars Provided by reason of employment by Third Parties
If an individual has, by reason of his or her employment, a car available for his or her private use, a taxable BIK arises even if the person providing the car is not the individual’s employer.
In such cases, it is broadly the third party who provided the benefit that is responsible for accounting for the PAYE, PRSI and USC on same, rather than the employer. However, the facts, circumstances, arrangements etc. relating to the benefit must be examined before the correct tax treatment can be determined in each case.
With regard, to the specific questions raised, I am advised by Revenue as follows:
1. A car salesman who has the use of a car from their employer Where an employee has an employer provided car made available to them for private use, BIK is charged on the basis of the general rules, outlined above. However, as the car salesman is employed in the motor industry, the simplification arrangement for the calculation of BIK may be availed of.
2. A company representative who is supplied with a vehicle to do their work Where a company representative, as an office holder/employee, is provided with a car that is available for their private use, the general BIK rules, outlined above, will apply.
3. An employee who receives a 'car allowance' with their salary Any amount payable as a car allowance to an employee in lieu of the use of a car is fully taxable and is therefore subject to tax via the PAYE system by the employer.
4. A 'brand ambassador' who has a new car supplied for their personal use As outlined above, the tax treatment regarding the provision of a car for personal use, depends on the particular facts and circumstances. If the brand ambassador is an employee of the provider of the car, the BIK rules outlined above will apply.
Where an individual is provided with the use of a car, otherwise in their capacity as an employee, and in circumstances where the individual agrees to provide a service, such as involving the promotion and marketing of the particular car brand, the individual will, depending on the particular facts and circumstances, be subject to tax under either Schedule D Case I/II or Case IV. If the service is provided in the carrying on of a trade/profession, a charge to tax under Case I/II will apply. A charge to tax under Case IV will apply in circumstances where the service is carried on otherwise than in the course of a trade. The taxable amount in each case would generally be based on a fair value of the use of the car.
I am advised by Revenue that further information on the taxation of employer-provided vehicles (including details regarding employees in the motor industry) is included in Tax and Duty Manual Part 05-01-01b, which is available at the following links:
www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-01b.pdf.
www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/private-use-companycars/index.aspx.
Finally, further information on the provision of third-party benefits to employees can be found in Tax and Duty Manual Part 05-01-01m, which is available at the following link: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-01m.pdf.
201. Deputy Mairéad Farrell asked the Minister for Finance if he will provide the report and guidance that his Department received from a company (details supplied) on behalf of the National Pension Reserve Fund Commission in 2008; and if he will make a statement on the matter. [34050/23]
View answerThe report referred to in the question is already in the public domain having been released under a freedom of information request to the Department of Finance in 2013. The FOI records from 2014 onwards are available on the Gov.ie site but the records for 2013 are archived. The record in question has been requested and when available will be shared with Deputy Farrell.
202. Deputy Pádraig O'Sullivan asked the Minister for Finance if consideration will be given to reducing excise duty on hydrotreated vegetable oil as a low emissions alternative to diesel; and if he will make a statement on the matter. [34119/23]
View answerThe application of excise duty on fuel in Ireland is governed by European Union law as set out in Directive 2003/96/EC, commonly known as the Energy Tax Directive (ETD). The ETD prescribes minimum tax rates for fuel with which all Member States must comply. ETD provisions on mineral oils are transposed into national law in Finance Act 1999 (as amended). Finance Act 1999 provides for the application of excise duty in the form of Mineral Oil Tax (MOT) to liquid fuels used for motor or heating purposes.
MOT is comprised of a non-carbon component and a carbon component with the carbon component being referred to in legislation as the carbon charge but more commonly as the carbon tax. The non-carbon component of MOT is often referred to as “excise”, “fuel excise”, “fuel tax” or “fuel duty” but it is important to note that both components are part of MOT which is an excise duty. MOT law specifies rates of taxation for certain fuels and uses. Standard rates apply to fuels used for propellant purposes including in road vehicles. Reduced rates apply to fuels used for all other purposes, such as heating. Full details on current MOT rates are published on the Revenue website at www.revenue.ie/en/tax-professionals/tdm/excise/excise-duty-rates/energy-excise-duty-rates.pdf.
Where a liquid that is not specified in MOT law is used as a motor or heating fuel, “substitute fuel” rates apply. A substitute fuel used in place of auto-diesel attracts the auto-diesel rate of MOT and petrol substitutes are taxed at the MOT rate applicable to petrol. Substitute fuels used for reduced rate purposes, attract the Marked Gas Oil rate of MOT. Some substitute fuels are of synthetic origin but those that are produced entirely from biomass are regarded as a biofuel for MOT purposes and qualify for a partial relief from MOT. Section 100(5) of Finance Act 1999, which has been in place since 2012, provides that biofuels, such as hydrotreated vegetable oil (HVO), are relieved from the carbon component of MOT. The table below summarises current MOT rates applicable to substitute fuels. It also details the effective MOT rate on substitute fuels that are produced from biomass, i.e. biofuels, net of the carbon tax relief.
|
Substitute fuel use |
Non-carbon component of MOT |
Carbon component of MOT |
Total MOT(i.e. Non-carbon plus carbon) |
Effective MOT on biofuel (i.e. Non-carbon rate only) |
|
Instead of petrol |
€419.89 |
€112.23 |
€532.12 |
€419.89 |
|
Instead of auto-diesel |
€336.29 |
€129.81 |
€466.10 |
€336.29 |
|
Non-propellant purposes such as heating |
€8.81 |
€131.47 |
€140.28 |
€8.81 |
As the rates above indicate, biofuels such as HVO benefit from significantly lower MOT rates due to the carbon tax relief. This tax treatment is intended to promote a higher level of biofuel usage and supports the Government’s commitment to incentivising more environmentally friendly alternatives to fossil fuels. As the carbon component of MOT is fully relieved for biofuels, these fuels are not impacted by the ten-year trajectory of carbon tax increases which was introduced in Finance Act 2020. This means that, as annual increases in the carbon tax take effect, the differential in tax costs between biofuels and fossil fuels will continue to widen, further incentivising the uptake of biofuels.
203. Deputy Colm Burke asked the Minister for Finance if he will give due consideration to granting tax relief at the higher rate on all non-routine dental care; and if he will make a statement on the matter. [34134/23]
View answerAs the Deputy will be aware, with effect from 1 January 2009, tax relief in respect of qualifying health expenses, with the exception of relief in respect of nursing home expenditure, has been granted at the standard rate of tax. Prior to that date, tax relief was available at the taxpayer's marginal rate of income tax. The decision to standardise health expenses relief was to widen the tax base and bring the rate at which relief was granted into line with the majority of tax expenditures. In addition, the standard rating of the relief has made the tax system fairer, in that all beneficiaries may receive tax relief at the same rate, currently 20 per cent.
The rationale behind income tax relief for health expenses is broadly intended to provide assistance for significant or exceptional health expenses. I would note that this is a broadly availed of relief. In 2020, the cost of tax relief for health expenses (excluding nursing home expenses) was €146 million and it was availed of by 538,000 claimants.
In my view, the availability of tax relief at the standard rate of income tax for health expenses, is the most appropriate use of fiscal resources. As such, I have no plans to enhance the relief.
204. Deputy Carol Nolan asked the Minister for Finance if his Department or any agency under the aegis of his Department operates a ‘barter account’ for the provision of goods or services; if so, if payments have been directed to be made to a barter account during the period 2011 to date; and if he will make a statement on the matter. [34147/23]
View answerI wish to advise the Deputy that neither my Department nor any agency under the aegis of my Department operates a 'barter account' for the provision of goods or services.
205. Deputy Róisín Shortall asked the Minister for Finance for an outline of the interest rate profile of Ireland's national debt, indicating the prevailing interest rate on all debt currently outstanding; and if he will make a statement on the matter. [34161/23]
View answerI am advised by the National Treasury Management Agency (NTMA) who manage the National Debt on behalf of the State, that there are different ways of presenting the interest rates on Ireland’s public debt as there are different measures of both debt and interest. There is the National (or Exchequer) Debt and the related debt service cost, but there is also General Government Debt and the related interest measure.
The most up-to-date data available is in respect of the National Debt and that is the focus of the figures presented in this response.
Gross National Debt (GND) is the debt of the Exchequer before the deduction of cash balances and other financial assets. GND stood at €236.9bn at end-June 2023.
The table below shows both the outstanding balances and average interest rates applicable for each of the five main components of GND, as at end-June. At that date, the weighted average interest rate on the entire GND portfolio is estimated to be 1.5%.
|
As at end-June 2023 |
€bn |
% |
|
Bonds |
143.7 |
1.6 |
|
EU Loans |
43.4 |
1.4 |
|
Other Medium/Long-Term Debt |
5.4 |
1.7 |
|
State Savings |
20.0 |
0.7 |
|
Short-term debt |
24.4 |
1.9 |
|
Total GND |
236.9 |
1.5 |
Notes:
1. Figures are provisional and unaudited.
2. The EU loans category comprises loans from the European Financial Stabilisation Mechanism (EFSM), European Financial Stability Facility (EFSF) and the SURE programme. The rate on the EFSF facility is an average of the daily pooled rate over the year to end-June 2023. It excludes fees.
3. The rate on State Savings is the estimated blended Annual Equivalent Rate (AER) on fixed rate products and prize bonds as at end-May 2023.
4. Short-term debt comprises Exchequer and Central Treasury Notes, Euro Commercial Paper (ECP) and Borrowing from Ministerial Funds. The rate on ECP is a weighted average, euro equivalent interest rate.
206. Deputy Peadar Tóibín asked the Minister for Finance what lobbying has been documented on the file pertaining to the setup and development and implementation of the residential zoned land tax. [34200/23]
View answer210. Deputy Peadar Tóibín asked the Minister for Finance how many planning authority/local authority officials raised concerns with his Department in relation to the implementation and execution of the residential zoned land tax. [34211/23]
View answerI propose to take Questions Nos. 206 and 210 together.
The residential zoned land tax (RZLT) is a new tax introduced in Finance Act 2021 which seeks to increase housing supply by encouraging the activation of development on lands which are suitably zoned and appropriately serviced. It aims to bring those lands which have benefitted from investment in services and are capable of being developed forward for housing. The tax is an action contained in Housing for All, the Government’s plan for housing, to increase housing supply and is supported in the Programme for Government.
As with all tax policy areas, the Department receives representations, submissions and general correspondence from interested parties, including from taxpayers and various representative bodies. In relation to the residential zoned land tax, the Department has received correspondence from various industry representative bodies, including those representing the agriculture, building and construction industries. The Department has also received correspondence from individuals and other organizations regarding the tax. All correspondence received is considered as part of policy formation and as part of the normal budgetary and Finance Bill process.
My Department and the Department of Housing, Local Government and Heritage continue to engage with representative bodies in relation to the residential zoned land tax.
In relation to the Deputy's specific query regarding the number of local authorities which have contacted my Department regarding the residential zoned land tax, I can confirm that I have received correspondence from three local authorities regarding the tax.
207. Deputy Peadar Tóibín asked the Minister for Finance what influence, if any, his Department or the Revenue Commissioners have on the adoption of the broad-brush approach used to creating, mapping and implementing the residential zoned land tax. [34203/23]
View answerA key objective of the Government’s Housing for All plan is a pathway to increase housing supply, including a focus on providing an adequate supply of available serviced zoned land for the development of housing. In this regard, provision was made for a new tax on land zoned for residential development, which also has the necessary services in place. The purpose of this Residential Zoned Land Tax (RZLT) is to encourage development of appropriately zoned and serviced land. It is designed primarily as a behaviour changing measure and not to be a significant revenue raising measure.
Finance Act 2021 introduced Part 22A of the Taxes Consolidation Act 1997, which outlines the process by which a mapping exercise is undertaken by local authorities to identify zoned and serviced land which falls within the scope of RZLT. The legislation provides that each local authority will prepare and publish a final map identifying land within the scope of the tax by 1 December 2023. Draft zoned land maps were prepared and published by local authorities for their respective functional areas by 1 November 2022. Supplemental maps were published by local authorities by 1 May 2023.
The Department of Finance and the Revenue Commissioners had no influence or role in the approach taken, broad-brush or otherwise, to create the residential zoned land maps for the purposes of the residential zoned land tax.
I have been informed by officials in Department of Housing, Local Government and Heritage that local authority planning departments, in conjunction with Department of Housing Local Government and Heritage, published a Residential Land Availability Survey (RLAS) in February 2015, covering all lands zoned for residential development in statutory local authority development plans and local area plans across Ireland. The survey showed the location and quantity of lands that may be regarded as being undeveloped and available for residential development purposes in each local authority area.
I have also been informed by the Department of Housing, Local Government and Heritage that the aggregate area of all such private and public land identified in 2015 amounted to 17,434 hectares which, given a range of densities applicable to whether the lands are in small villages or in larger towns and cities and as determined by the relevant local authorities, was estimated to ultimately enable the construction of in excess of 400,000 dwellings.
208. Deputy Peadar Tóibín asked the Minister for Finance what consideration was given to the impact of residential zoned land tax liabilities on working farm incomes and the impact of this tax on the income of farming families, many of whom are operating on the knife-edge of viability. [34208/23]
View answer209. Deputy Peadar Tóibín asked the Minister for Finance the input from the Minister of Agriculture, Food and the Marine in the formation of the residential zoned land tax and the criteria for exclusion, given that there is no exclusion for working farmland; and if he will make a statement on the matter. [34209/23]
View answerI propose to take Questions Nos. 208 and 209 together.
The Residential Zoned Land Tax (RZLT) is a new tax introduced in Finance Act 2021 which seeks to increase housing supply by encouraging the activation of development on lands which are suitably zoned and appropriately serviced. It aims to bring those lands which have benefitted from investment in services and are capable of being developed forward for housing. The tax is an action contained in Housing for All, the Government’s plan for housing, to increase housing supply and is supported in the Programme for Government.
The tax applies to land that is:
• zoned suitable for residential development whether it be solely or primarily for residential use, or for a mixture of uses, including residential use, and
• serviced (that is: reasonable to consider may have access, or be connected, to public infrastructure and facilities, including roads and footpaths, public lighting, foul sewer drainage, surface water drainage and water supply, necessary for dwellings to be developed and with sufficient service capacity available for such development)
In order to be liable for the tax the land must meet both criteria.
Each local authority, in preparing the draft RZLT maps, determined whether the zoned land is connected or able to connect to the six required categories of services. Any exclusions which would rule the land out of scope were applied. The local authorities then published a draft RZLT map identifying the land which meets the requirements of the legislation and which may be liable to the tax. The tax will first be due and payable in 2024.
It is important to note that, to come within the scope of RZLT, farmland must be both zoned for residential use and serviced. Farmland that is zoned for residential use, but which is not currently serviced, is not within the scope of the tax and will only come within the scope of the tax should the land become serviced at some point in the future.
Agricultural land which is zoned solely or primarily for residential use meets the criteria set out within the legislation and therefore falls within the scope of the tax. Agricultural land that is zoned for a mixture of uses including residential is not in scope. These zonings are considered to reflect the housing need set out within the core strategy for the relevant local authority area and landowners within such zonings may fall within the scope of the tax, in the interests of ensuring an appropriate supply of housing on zoned lands.
A landowner with land identified on any published draft map had the opportunity to make a submission to the local authority regarding the land, setting out why they consider that the land does not meet the criteria for inclusion within the scope of the tax. For example, if the land is not zoned for residential use, if the land does not have access to or there is no capacity for any of the six servicing criteria, or if the land benefits from an exclusion as outlined in the legislation. The local authority was required to assess any submission and inform the landowner of their decision to either remove or retain the land on the map by 1 April 2023. If dissatisfied with the local authority decision, the landowner could have appealed the determination to An Bord Pleanála, again setting out why the land does not meet the criteria for inclusion for the tax.
In addition to being able to make a submission regarding inclusion of land on a draft map, the landowner had the opportunity to submit a request to change the zoning of the land by variation of the adopted development plan. Where the zoning is amended to a use other than residential or mixed use including residential, it would not meet the criteria for the tax and would be removed from RZLT maps. Decisions on whether to amend zonings as a result of submissions or at any other time are a matter for the local authority, taking into account the need to ensure that housing supply targets across the county can be met. Additionally, provision is made in the Planning and Development Act 2000 for elected members to seek a report from their Chief Executive on the matter of proposed re-zonings.
It is acknowledged that the tax may impact on some landowners, including farmers, however if the land in question is zoned for a particular purpose under a plan adopted by the local authority and has been subject to investment by the local authority and the State in the services necessary to enable development for housing to accommodate increased population, it is intended that the land should be used for housing. This tax measure is a key pillar of the Government’s response to address the urgent need to increase housing supply in suitable locations.
In relation to the Deputy's query regarding input from the Minister of Agriculture, Food and the Marine, I would remind the Deputy that this tax was developed on foot of a Government decision in the context of the Housing for All plan which aims to increase housing supply in the country. My Department continues to engage with the Department of Agriculture, Food and the Marine on the Residential Zoned Land Tax as well as engaging with representative bodies for the sector.
