Vol. 1062 No. 8
6. Deputy Naoise Ó Cearúil asked the Minister for Finance the number of rent tax credit claims that have been made in County Kildare for 2024; if the increase in the value of the credit for 2025 is leading to any increased uptake; and if he will make a statement on the matter. [5013/25]
Tá ceist Uimh. 6, atá in ainm an Teachta Naoise Ó Cearúil, á tógáil ag an Teachta Aindrias Moynihan.
Gabhaim buíochas leis an gCathaoirleach Gníomhach. Since its inception two years ago, the rent tax credit has provided significant assistance to people who are renting. Can the Minister give an indication on the take-up of that credit, particularly with regard to County Kildare, and also County Cork if he has those data available? As the rent tax credit was recently increased at the last budget, can he give an indication whether the increased value of that credit has increased its take-up?
I am going to have to disappoint the Deputy as I have the information for Kildare but not Cork available this morning. Of course, I can get that information for him and will share it with him quickly.
The rent tax credit, as he outlined, has been brought in. In budget 2025, it was increased to €1,000 for a single person and €2,000 for a jointly assessed couple. This increase applies for 2025 and also retrospectively for 2024 in recognition of the cost-of-living pressures facing many renters. The statistics relating to the rent tax credit for 2024-25 are only available for PAYE taxpayers. They are, therefore, made on a taxpayer unit basis.
As regards County Kildare, it was 8,634 taxpayer units for 2024 and 985 for 2025. Most claims for credits, however, take place after the year end. I expect that the bulk of claims for this year will not be made until next year. I see no reason at all for this year's figure to be lower than what it was in 2024. Of course, I will provide the Deputy with the information for Cork and will write to his office in that regard.
I appreciate that the Cork figures may not be as readily to hand. I look forward to reviewing them later. The credit has been a real support for many people who are renting and it is easing some of the burden. We have included in the programme for Government that there would be further improvement on the credit. I am trying to get an understanding on any engagement or discussions the Minister has had up to now on making improvements and enhancing it, be that through doing it over five budgets or in one or two of the earlier budgets. Can the Minister provide any indication or discussion he has had in this regard? It has been a valuable relief for many renters both last year and the year before that. I wish to ensure that this commitment is grown upon.
The commitment in the programme for Government is very clear. We recognise the value and support this credit has provided. Over time, in the different budgets the Government will bring forward, we will seek to improve it, as will be the case with other important credits and tax reliefs. It has played a role in helping with the affordability of rents for many tenants. I agree with all the Deputy said in this regard. I am confident, as we bring budgets forward, that we will be able to make progress on the relief and support that it offers to those who are renting.
Is mór an cabhair é an faoiseamh cánach dóibh siúd atá ag tógáil áit chónaithe ar cíos. Tá sé mar chuid den chlár Rialtais amach romhainn go gcuirfí leis seo agus go gcuirfí breis cabhrach ar fáil do dhaoine. An bhféadfadh an tAire insint dúinn cén plean nó comhrá a bhí aige go dtí seo ar conas é sin a leathnú amach agus forbairt a dhéanamh air? The programme for Government also commits to helping renters who are seeking to become home buyers with a series of targeted measures, both in the tax system and in the first home scheme, for example. While I appreciate it is early, has the Minister had any discussions up to now with regard to the tax changes in that area? Can he give us a sense as to how he sees that being rolled out in the years and budgets ahead?
We have not yet had discussions in that regard, to be frank with the Deputy, because of how early we are in the lifetime of this Government and in preparing for the next budget. Of course, we have schemes in place such as the first home scheme, which is a shared equity scheme, and the help to buy scheme. They are designed to help everybody looking to buy their first home, particularly new builds in the context of the help to buy scheme, and make a contribution to the deposit for that. That applies to everyone. It is of particular help to those who have challenges in building up their deposit. We appreciate the importance of those schemes in both helping with affordability and providing the incentive for supply to increase. As I said, between those particular schemes and where we are with the rent tax credit, they are the kinds of interventions that I hope are of help to many in dealing with the high cost of housing at the moment.
7. Deputy Ged Nash asked the Minister for Finance to provide details of any assessments made by his Department on the impact on the Irish economy of the possible introduction of certain tariffs by the US Government that will act as a barrier to trade between the United States and the EU; the preparations his Department is making to deal with this issue; and if he will make a statement on the matter. [5148/25]
12. Deputy Richard Boyd Barrett asked the Minister for Finance the preparations and scenario planning he is undertaking to deal with the possible implications for the Irish economy of the policies of the new Trump administration in the United States; and if he will make a statement on the matter. [5105/25]
Anois, bogfaidh muid ar aghaidh go ceisteanna Uimh. 7 agus 12 in ainmneacha na dTeachtaí Nash agus Boyd Barrett.
My question relates to a matter which has been raised on two separate occasions in the House this morning, that is, the impact of potential tariffs being considered by the US on Ireland and the EU's trade with the US and any assessments the Department may have undertaken at this stage on that impact. The Minister addressed the matter earlier but I have a couple of related questions in the follow-up discussion.
To facilitate a back-and-forth discussion on the issue, I will quickly emphasise what I said in reply to Deputy Connolly earlier. Of course, due to Ireland being an open trading economy, we can be strongly affected by changes that happen in global trade. We are currently considering these potential scenarios and they will be outlined in the stability programme update in April.
One of the implications of all of this that is probably less well understood is the fact that Ireland is the ninth-largest foreign direct investor in the US economy and that Irish firms are responsible for a substantial number of good jobs in the US. Of course, President Trump is nothing if not unpredictable. We were expecting some form of white smoke from the White House this week as to what any potential tariffs may look like. Obviously, Ireland is especially exposed. On that basis, obviously, much of the responsibility in dealing with tariffs would be an all-of-government responsibility. The Minister for enterprise, Deputy Peter Burke, will have a lead role, as will the Tánaiste and Minister for trade, Deputy Harris. From the Minister, Deputy Donohoe's, own point of view, however, does he accept - and this is a long-standing issue about which we have been told time and again - that we need to broaden our tax base to try, insofar as we can, insulate our own public finances from the threats that will potentially arise?
Of course we need to do that. We have made efforts to do that in recent years and need to continue to do so. That is why changes with regard to carbon taxation continue to be essential. It is why changes that we will make in the time ahead to our PRSI system to ensure that our Social Insurance Fund is sustainably funded in the years ahead are really vital. As regards other things we need to do, that is why I have made the case over many years for running budget surpluses.
Imagine where we would be today if we were considering the economic risks we face and we were borrowing lots of money. The risks we are all about to discuss would be multiplied even further. Thankfully we are not in that position but as I said earlier, we also need to look at the investments we can make that deal with not only the needs of our society but also make us more economically competitive and sustainable. That work is currently being overseen, in particular by the Minister, Deputy Chambers as we look at changes we can make to our national development plan.
Donald Trump is on a wrecking mission, that is obvious, although I would caution against allowing his administration to bully us. The reason they have to make America great again is the American economy has declined massively. It used to have 40% GDP, which then went down to 20% by 2014 and it is now down to 15%. The American empire is in decline and Donald Trump personifies that decline. He is trying to reassert global hegemony by bullying people and we should not be bullied. Most of the multinationals here are here because they make a lot of money and they are not going to run away and leave those profits behind.
Having said that, the key thing is we have to diversify our economy. We are too vulnerable, not just to Americans but to a small number of flipping oligarchs - I do not care what country they are from - including a tiny number of the Elon Musks of this world and their equivalents in multinationals. That is the problem. We need to diversify our economy and we need to tax these people more. The Minister says expand the tax base by carbon taxes; I say wealth taxes, financial transaction taxes and taxes on wealth and capital so that these people do not control our fate.
There is an obvious contradiction in what the Deputy is saying.
There is not.
Of course there is.
It is a contradiction of what the Minister says.
It is great to hear the Deputy make the case for the resilience of foreign direct investment, which is a new departure for him that I welcome but, on the one hand, what he is saying-----
I have been making that argument for years.
-----is this employment has a value, and there are lots of these employers in Ireland, and then he is making the case that we should tax them even more and apply wealth taxes to them.
How is that going to help with the challenges we have regarding the safety of our public finances and keeping jobs in Ireland if we are going to tax them more and more? Of course we need to diversify our economy. Of course we need to ensure we have more sources of growth in our jobs market but it should be noted that we have never had more people at work in Ireland and the public finances are in surplus, which is due to the fact that we have a variety of different employers in our country, all of whom are contributing to the creation of jobs and our tax revenues.
Is it Deputy Nash again or myself?
Is Deputy Nash coming in one more time?
We have one supplementary question each left.
There is more than a grain of truth in what some colleagues said earlier but I would not put it in the way they have. There is an imbalance in the Irish economic and enterprise model and we are all aware of that, notwithstanding that we have to recognise the incredible work being done by Enterprise Ireland. I remind Deputy Tóibín to look at the Enterprise Ireland job statistics from last year. They are quite extraordinary and they compare very favourably with IDA Ireland's but there is a larger job of work to be done in that regard. I have no doubt that looking at the focus on the indigenous economy that we need to keep a close eye on research and development tax credits, for example, and how we can better operate those to encourage the development of indigenous enterprise, to grow sustainable Irish jobs and to ensure high potential Irish companies go global from here.
I have always argued that multinational capital is not quite as mobile as the Minister thinks. They make big investments and do not just run off and leave them overnight. The Government parties have argued that they have to get down on their knees and offer them zero-rate taxes. The rate is 12.5% in theory but in reality it is less than 1% for Apple, as we know. In reality, it is an effective rate of approximately 5% across the board for multinationals but the truth is they are making a lot of profits here, far more than anywhere else. They need access to the European market, by and large, they want to be in an English-speaking country and they need a skilled workforce. That is something the Government should be thinking about because we are falling down in that area. Our third level institutions are falling down the international league tables. We are putting fees in the way of people getting MAs and doctorates and so on. That is the kind of investment we need to make ourselves more resilient against the behaviour of the Elon Musks and the Donald Trumps of this world.
I agree with Deputy Nash that we need to continue our efforts to diversify our economy and to support employers of all different shapes and sizes. I thank him for recognising the work of Enterprise Ireland in this regard. It does exceptional work. I believe the strength of our food sector and the growing strength of our energy sector within our economy are examples of how we can strengthen the diversity of employment and the diversity of where we can generate economic growth in the future. That remains the key mission of the Government to create the money and resources we need to invest back into the better society and to deal with all the issues the House is well aware of.
Deputy Boyd Barrett knows I have great respect for him as an individual. While I disagree with many of his views, I have always admired their consistency. I have to honestly say to him that the points he is making here today at best sound naive, if not quite dangerous, given the risks we are confronting here today.
Trump is dangerous but the Government can go on talking to him.
For the Deputy to suggest, given the difficulties we clearly face, on which I answered questions earlier regarding the implementation of a current global tax deal, that jobs and our competitiveness could be secured by going beyond that and taxing more by bringing in new forms of tax, shows no understanding of what it takes to create a job and keep it in Ireland. The path the Deputy is advocating for is one that would lead to a weaker and more vulnerable economy. It is a course of action that I am certainly not going to follow.
Anois tá Ceist Uimh. 8 i m'ainm féin, ach á tógáil ag an Teachta John Connolly.
8. Deputy Pádraig O'Sullivan asked the Minister for Finance if he shares the concerns that the disabled drivers and disabled passengers' scheme is no longer fit for purpose; and if he will make a statement on the matter. [4906/25]
Tá mé an-sásta an cheist seo a chuir ar an Aire ar son an Teachta O'Sullivan. Mar is eol dó, bhí díospóireacht againn aréir inár bpáirtí parlaiminte ar an ábhar seo. Last night at our parliamentary party meeting, this issue was raised and concern was expressed by a number of Members about the application of the disabled drivers and disabled passengers scheme. The Minister will be aware that the scheme offers those eligible to avail of a repayment of VRT and VAT on the purchase of vehicles and to exempt those eligible from paying motor tax. Concern is being brought to our attention, however, by a high number of refusal rates on such applications and by people finding the application process quite complex and difficult to navigate. Does the Minister have any intention of adapting the scheme?
I congratulate Deputy O'Sullivan on his election to Dáil Éireann and I thank him for his first question to me on what I know is a very important matter. My Department and I share concerns that the scheme is no longer fit for purpose and believe it should be replaced with a needs-based, grant-led approach for necessary vehicle adaptations that could serve to improve the functional mobility of the individual.
Under the previous Government, the national disability and inclusion strategy, NDIS, transport working group recommended that the disabled drivers and disabled passengers scheme be replaced with a modern, fit-for-purpose vehicular adaptation scheme. This is in line with the general view that we need to move away from a medical criteria-based approach to a needs-based approach.
Subsequently, under the aegis of the Department of the Taoiseach, the subgroup convened to progress these proposals for a needs-based, grant-aided, modern vehicle adaptation supports to replace the disabled drivers scheme, DDS, have produced a report that has been submitted to the Department of the Taoiseach, for its consideration.
In that context, any further changes to the existing scheme would run counter to proposals to entirely replace the scheme with a modern, fit-for-purpose vehicular adaptation scheme. The programme for Government commits to progressing the review of the scheme and this is very much a matter for a wider government response.
While I do not have responsibility for disability policy, I do have responsibility for a number of the other issues raised by the Deputy. I will work with my Government colleagues to progress this matter in the coming months.
I apologise to the Deputy. I referred to him using the name of the Deputy who put down the question in written form. I have not met Deputy Connolly before. I congratulate him. I am sorry I opened by referring to him as another TD.
That is no problem. I could not be mistaken for a better person.
I welcome the Minister's response and the sentiment contained in it, particularly the information that a new scheme is being proposed in this area. This would be welcomed by all Members of the House and many sectoral interests working on behalf of people with disabilities. In respect of the report submitted to the Department of the Taoiseach, is there any update about when that might be published and will there be a debate on the issue among Members?
I do not have a timeline regarding the publication of that report - if indeed it will be published. Of course, any changes we would make would be subject to debate in the Chamber and because they may require legislative change, they will be discussed by the Committee on Finance, Public Expenditure and Reform, and Taoiseach. There will, therefore, be ample opportunity for the Deputy to put questions to me on the matter and for me to hear his views on it.
I welcome that.
9. Deputy Matt Carthy asked the Minister for Finance the current total number and value of State investments in companies which derive profit from their activities in illegal Israeli settlements; the total number of such investments; his views on whether such investments help entrench and sustain Israel’s illegal occupation; his further views on whether such investments run contrary to rulings of the International Court of Justice; and the amount of profit Ireland derived from such investments since 2022, by company, by year, in tabular form. [4903/25]
14. Deputy Pa Daly asked the Minister for Finance if he will consider reviewing and amending the Ireland Strategic Investment Fund for companies that operate in illegal Israeli settlements. [5223/25]
This is an issue we have raised on numerous occasions. My colleague has legislation before the House that has, unfortunately, been blocked by Fianna Fáil and Fine Gael in the face of a genocide. The question asks for the current total number and value of State investments in companies that derive profit from their activities in illegal Israeli settlements, the total number of such investments, the Minister's view on whether such investments help entrench and sustain Israel’s illegal occupation and run contrary to rulings of the International Court of Justice and the amount of profit Ireland derived from such investments since 2022, by company, by year and in tabular form.
I propose to take Questions Nos. 9 and 14 together.
As Deputies are aware, the UN maintains a database of businesses involved in certain specified activities relating to settlements in the occupied Palestinian territories, OPT. At the end of 2023, direct investments by the Ireland Strategic Investment Fund, ISIF, in companies on the UN database was approximately €4.2 million in 11 companies. ISIF’s indirect investments included eight companies, totalling approximately €9.4 million. ISIF divested from six of these companies with a total value of approximately €2.95 million in 2024. The six companies were Bank Hapoalim BM, Bank Leumi-le Israel BM, Israel Discount Bank Limited, Mizrahi Tefahot Bank Limited, First International Bank Limited and Rami Levi Chain Stores Limited.
ISIF continues to monitor its holdings to ensure that investments are within ISIF’s risk profile and investment parameters. Given commercial sensitivities, ISIF does not comment on individual investment decisions. ISIF publishes information on the overall return of its global portfolio as part of the National Treasury Management Agency's, NTMA, annual report but does not publish a breakdown of returns by each individual investment.
The amount of investment by ISIF in the companies on the UN list is small compared with the market capitalisation of many of these companies. It is also small - if not very small - relative to the size of the Irish economy. It is not clear as to the level of income such companies derive from activities in the occupied territories. It is not certain that these investments, therefore, in themselves represent a significant contributory factor in maintaining Israel’s presence in the occupied Palestinian territories.
The issue of whether investments by ISIF in particular companies which, as part of their business model, have some activity in the occupied Palestinian territories runs contrary to the rulings of the International Court of Justice would need further consideration. I understand that discussion is ongoing at EU level on a legal analysis of the advisory opinion from the court.
The National Treasury Management Agency (Amendment) Act 2014 sets out ISIF’s mandate with regard to the investment of the fund. Under the amendment Act, the agency has responsibility for determining, monitoring and keeping under review an investment strategy for the fund in accordance with the investment policy for the fund.
On the issue of amending the fund, ISIF has a policy of limited disinvestment. For example, the Fossil Fuel Divestment Act 2018 provides for the divestment by ISIF from certain fossil fuel undertakings. This builds on ISIF’s existing investment exclusionary strategy in respect of cluster munitions and anti-personnel mines, coal production and processing and tobacco manufacturing.
I note the Minister said that ISIF considers a variety of factors. I presume genocide, killing civilians and facilitating illegal settlements are included in that. I acknowledge that there has been some divestment from illegally occupied Palestinian areas and the Golan Heights but this is not the entire story. It is important to realise that it had been reported that ISIF still had a €1.3 million shareholding in the Israel Defense Forces-linked Palantir Technologies we heard about last December. The Israel Defense Forces, IDF, have used Palantir-supplied technology to target civilians in Gaza after a deal with the US company was announced in January 2025. There is also €1.1 million worth of shares in a controversial Israeli tech firm that partners with Israeli arms manufacturers and is run by former IDF intelligence officers who have faced demands to stop doing business in Russia.
The Government has been content to allow IDF cargo planes to fly through Irish sovereign airspace. One junior Minister in the previous Government had cause to meet Israelis and instead of being reprimanded, was promoted. It seems the Government is prepared to pay lip service to the Palestinian people but is not really prepared to shout "Stop". Is the Government looking at divesting from all of these funds or does the Minister consider the matter complete?
I disagree strongly with the Deputy's overall analysis regarding the Government's stance on the people of Palestine. From the decision we made regarding the recognition of the Palestinian state, one supported by the entire Dáil, to the ongoing funding we have provided through multilateral and international organisations to support those people, who have seen such harm and loss of life in recent months, our stance is very clear and is understood and valued by those who represent the people of Palestine at a political level.
Regarding the Deputy's point about divestment, if I look at the value of the shares held directly and indirectly by ISIF, it is not clear that they play any role in supporting the occupation of Palestinian territories. The Deputy referred to the fact that there has been much legal analysis and debate about this. I will consider the content of that advice in the coming weeks, particularly the legal assessment about the impact of the decision of the International Court of Justice on these kinds of matters.
It seems that some of the direct investments that were mentioned, which are controlled by ISIF, are not pooled investments. They are in banks such as Bank Leumi-le Israel BM, which is one of the largest banks in Israel. For decades, this bank has facilitated the expansion of illegal settlements. It granted a loan for a construction project in the Palestinian village of Azzun and bankrolled five illegal settlements. I note from the programme for Government that the Government has committed to progressing the Control of Economic Activity (Occupied Territories) Bill but what is progressing is kicking the can further down the road. This is what it seems like to many people. The Government seems to be dragging its feet and watering down its commitment.
It seems to me it is not being strong enough. It is not shouting "Stop" and saying that we will not invest in anything that has any risk of further displacing or killing people, including the weakest and most vulnerable civilians. The ceasefire in Gaza is in danger because Israel has violated it several times. We need to be stronger, to shout that we will not tolerate this anymore and completely divest from anything that is displacing people.
My colleague, Deputy Daly, has outlined clearly and in detail the activities of some of these companies in which Ireland is investing. I will put the issue to the Minister again. We have raised it numerous times during meetings of the finance committee where we have tried to pursue the legislation. What the Minister has told the House is that millions of euro of taxpayers' money are invested in companies that derive their profits from the illegal Israeli settlements. That is repugnant to hundreds of thousands of people who cannot stop it. The only person who can stop it is the Minister. The idea that their taxpayers' money, which they pay when they have finished their week on the shop floor, is being invested, no matter how big or small the investments - and millions are being invested - in companies that are operating in illegal Israeli settlements is repugnant and should stop today. That is what this is all about. It is not about asking whether €4 million is going to have a big impact or not. It should not be happening at all. It should be stopped immediately. It should have been stopped ages ago but it really needs to stop now. I am asking the Minister to engage with the Ireland Strategic Investment Fund, ISIF, to ensure that we divest from those investments without delay.
Hear, hear.
It is important to acknowledge that the overall size of the Israeli economy is €500 billion. That is how big that economy is. ISIF is enormous, and many different investments are taking place across the world. We have already seen ISIF divest from companies within Israel. As I said in response to the House earlier, it is not clear to me, given the scale of the investment that ISIF has, both directly and indirectly, that it is in any way playing a role-----
The State is making profit from illegal settlements.
-----in funding the kinds of activities and the approach that this Government has been clear in condemning. I have said to the House that I am aware of all of the legal debate that has taken place about the Sinn Féin Bill and the issues that have been raised. I am, of course, going to consider the issue further.
10. Deputy Cathal Crowe asked the Minister for Finance if he will consider amending inheritance tax thresholds for individuals who have no children of their own or nieces or nephews; and if he will make a statement on the matter. [4854/25]
Gabhaim buíochas arís leis an gCathaoirleach Gníomhach agus tugaim leithscéal an Teachta Crowe don Teach.
I am sure that, like us all, the Minister has received substantial correspondence on this issue. There is a perceived discrimination in the application of inheritance tax that impacts families who have no children of their own. As the Minister will be well aware, strong bonds exist between aunts, uncles, nieces and nephews. Often in such situations, the nieces and nephews become the primary carers for their aunts or uncles. The income threshold is ten times greater for a child than it is for a niece or nephew. Is any consideration being given to amending those rules?
The Deputy should note at the outset that capital acquisitions tax, CAT, is a beneficiary-orientated tax that is payable by the recipient of a gift or inheritance as opposed to the person providing that gift or inheritance. The relationship between the person giving a gift or inheritance, the disponer, and the person who receives it, the beneficiary, determines the maximum amount, known as the "group threshold", below which CAT does not arise.
The group A threshold is currently €400,000 and applies where the beneficiary is a child, including adopted child, stepchild and certain foster children of the disponer. The group B threshold is currently €40,000 and applies where the beneficiary is a brother, sister, nephew, niece or lineal ancestor or lineal descendant, such as a grandchild, of the disponer. The group C threshold is currently €20,000 and applies in all other cases. Gifts and inheritances between spouses and civil partners are exempt from CAT.
Where a person receives gifts or inheritances that are in excess of the relevant tax-free threshold, capital acquisition tax at a rate of 33% applies on the excess benefit. There are a number of exemptions and reliefs from this tax that may apply depending on the circumstances of the case, many of which do not require that any specific family relationship applies.
The Deputy will be aware that there would be a significant cost in making substantial changes to the CAT thresholds and those who can access them. Therefore, any consideration of this type must be balanced against competing demands and as part of the annual budget and finance Bill cycle.
I thank the Minister for the response. We are all aware when proposing any change that it must be balanced against other areas within the Exchequer. The concern is that some people are entering a phase of their lives where they must give consideration to this issue. Our worry is that what they are passing on to their relatives is as much a tax burden as an asset. There should be some consideration of that point. Consideration should be afforded by bringing forward some type of equity in respect of the inheritance of somebody's principal private residence. If a family is going to leave their home to a descendant, we should bring greater equity to the thresholds for that purpose.
I thank the Deputy. I am well aware of the kinds of issues he has raised. I am sure his constituents raise them with him. Times of inheritance are obviously difficult moments for families. Tax bills at times of sadness can be considerable. As I said in my earlier answer, any change to this form of taxation brings a particular, and perhaps significant, cost. That must be considered as part of our normal budgetary process. I certainly take on board what the Deputy has said. It is a matter that has been raised with me and other Ministers for Finance over the years. There are good reasons that decisions on the issue have not been made in the way in which the Deputy is advocating. In the time ahead, we will consider the issue again. I thank the Deputy for raising it.
I thank the Minister for his response and for giving the issue further consideration.
11. Deputy Tom Brabazon asked the Minister for Finance his plans to engage with the Central Bank to review credit union lending limits to enhance their ability to serve their members. [5037/25]
Gabhaim buíochas leis an gCathaoirleach Gníomhach. I dtús báire, ba mhaith liom a rá gurb é an chéad bhabhta dom a bheith ag labhairt os comhair an Tí seo. Teastaíonn uaim buíochas ó chroí a ghabháil leis na daoine i nDáilcheantar Chuan Bhaile Átha Cliath Thuaidh a chuir anseo mé. Is mór an pribhléid agus an onóir dom a bheith anseo agus teastaíonn uaim buíochas ó chroí a ghabháil le mo bhean chéile Liz agus mo chlann féin, mo thacadóirí, baill an pháirtí agus mo chairde uilig ar fad a chabhraigh liom san fheachtas chun teacht anseo.
I thank my family and the party members, supporters and friends who got me here. It is a wonderful privilege to become a Member of this House. I sincerely thank them. I say to the people of Dublin Bay North who put me here that I hope to repay their trust with diligence and hard work.
Does the Minister of State have any plans to engage with the Central Bank to review credit union lending limits to enhance their ability to serve their members?
I compliment Deputy Brabazon and congratulate him on his election and his maiden contribution to the Dáil. I wish him well in the years ahead and assure him that any support or help we can give him in his endeavours to represent the people of Dublin Bay North will be forthcoming.
In January 2020, revised Central Bank lending regulations were put into effect on credit union house and business lending only. There is no regulatory limit on personal, unsecured lending which comprises approximately 87% of the credit union loan book.
At that time, the feedback statement set out the Central Bank's intention to perform and publish an analysis of credit union sector lending three years post the commencement of the amendments to the lending regulations in order to assess and analyse the actual impact which the changes to the lending regulations have had and to inform any decisions on the need for future change. The Central Bank commenced that analysis in quarter 4 of 2023 and consulted with credit union stakeholders on this matter. The former Minister of State and my officials had multiple constructive and open engagements with the Central Bank as part of that review.
On 11 December 2024, the Central Bank published consultation paper 159 - Consultation on Proposed Changes to the Credit Union Lending Regulations alongside a report on credit union lending on the Central Bank website. In the consultation paper, the Central Bank is proposing a number of targeted material changes to the credit union lending regulations in concentration limits for house and business lending and lending practices for specific categories of lending.
The Central Bank is now consulting on the following proposals for change: decoupling the limits to prescribe new separate concentration limits for house lending and business lending; removing tiering whereby all credit unions regardless of asset size may avail of the same concentration limits; and adjusting the lending capacity available to all credit unions for house and business lending, within the new concentration limits with house lending to be 30% of total assets and business lending to be 10%.
I welcome that there is a substantial section in the programme for Government on credit unions. I also welcome the pledge that has been honoured to retain a dedicated Minister of State with responsibility for financial services, credit unions and insurance. I congratulate the Minister of State on his appointment to that role. I also wish to mention the former Minister of State, Deputy Fleming who made a very significant contribution to this whole area in the last Government.
Late last year, the Central Bank of Ireland published a review of the regulatory framework for credit union lending and launched a public consultation on proposed changes to the framework. The proposed changes will ensure the regulatory framework remains appropriate to the sector and will provide greater scope for the those credit unions which wish to undertake further house and building lending. Does the Minister of State expect to make progress on this soon?
I also compliment my predecessor in this role, the former Minister of State, Deputy Fleming as well as Ministers of State, Deputies Richmond and Carroll MacNeill who did a lot of work in the area with the review of the credit unions which are such an important financial institution in all our communities right across this country and provide a great service. Take unsecured personal lending. Some 87% of credit union loans are personal lending but they do have the capacity to offer services in the area of mortgages and business lending. That is why the proposals are there now to increase the capacity to 30% in mortgages and 10% in business lending. We are in the process of finalising that. I will meet the relevant officials in my Department and the Central Bank in the coming weeks to try to bring that to a conclusion. It is good news for credit unions. I know from engaging with my own credit union in Mullingar, the North Midlands Credit Union, that it is looking forward to these new lending limits so it has the opportunity to offer greater services to its customers.
The whole idea of increasing the lending limits will introduce a better service to the credit union membership as well as increasing competition within the financial services sector which is very welcome. I look forward to that.
Has the Minister of State had a chance to engage with the credit union movement on this proposal since his recent appointment? Has consideration been given to bringing the credit union movement under the scope of the dormant accounts legislation?
I have not formally engaged with the credit union yet but it is on the agenda in the coming weeks. However, I have engaged informally. My own credit union had me at its schools table quiz last Thursday night and used the opportunity to talk to me about some of the challenges it is facing. I will be engaging with the credit unions in the coming weeks. The Deputy will be aware that the programme for Government contains a commitment to establish a five-year strategy to set out clearly, in consultation with the credit union movement, how we would like to see it develop and grow over the next five years. Credit unions do provide an invaluable service in their respective communities and offer an opportunity for greater competition in the financial services market. I will work with the credit union movement and Members in this House to clearly set out how we would like to see, develop and grow it in the coming years.
I engaged with my officials on the dormant accounts question earlier this week. How that might work in the future is under review.
13. Deputy Cian O'Callaghan asked the Minister for Finance for an update on the Revenue Commissioners' review of the taxes paid by Irish real estate funds; and if he will make a statement on the matter. [5042/25]
I start by congratulating Deputy Brabazon both on his election and on his maiden contribution. I know he has been a very hardworking, committed public representative for many years.
In 2020, the Minister said that investment funds were engaging in aggressive behaviour to avoid tax. He introduced a range of measures that were supposed to clamp down on this tax avoidance. Since then, these property investors have seen their tax halved despite growing the size of their portfolios by more than €8 billion during the same period. A review was commenced by Revenue in 2022 to investigate this tax avoidance. Where is this review? How many more years will the Minister allow this to continue?
The Deputy might clarify when he responds the source of the figure of €8 billion, please, so that we are clear on the particular point he is making.
I am advised by Revenue that in 2022 it commenced a compliance-based review of the Irish real estate fund, IREF, sector with one of its aims being to identify the reasons for the reduction in the amount of IREF withholding tax paid in 2021 relative to 2020, in each case arising from prior year taxable events. This gross payment data is published as part of Revenue’s annual corporation tax payments and returns publication.
I am further advised by Revenue that a large factor in the apparent reduction in tax collected in 2021 over tax collected in 2020 was the length of time it took for refund claims in respect of prior years to be received. Revenue also advise that some IREFs reported that the Covid-19 pandemic impacted the value of investment property, meaning they recorded losses in accounting periods ended in 2020.
I welcomed a recommendation of the Commission on Taxation and Welfare 2022 to undertake a review of the IREF regime. On 22 October 2024, my predecessor as Minister, Deputy Chambers, published the funds sector report “A Framework for Open, Resilient & Developing Markets”.
On IREFs, the funds review team recommended consideration of a public consultation to set out potential options for an entity-level tax for IREFs. Officials in my Department are reviewing this recommendation, as part of a wider consideration of the funds review report which I, in turn, will consider in due course.
I will come back to the Minister on the source of that figure.
So that I am clear, is the review commissioned by Revenue in 2022 published? The Minister referred to the other reports and reviews that are going on but will he clarify if that review is published?
A report published by the Central Bank last year found that 78% of the homes owned by investment funds were bought as existing properties. The report also found that institutional landlords increased monthly rents by about 4.1% more than other landlords. These funds are driving up rents, increasing house prices and locking out first-time buyers. Will the Minister, at very least, close down these loopholes that are allowing them to get away with tax evasion? Was the Revenue review published?
The review was a compliance review undertaken by Revenue and therefore it would not publish a document in relation to that, respecting taxpayer confidentiality. However, it has indicated, as I shared with the Deputy, the tax payments that were made by that sector to the Exchequer over recent years. For 2023, that figure stands at €31.8 million. In 2017, that figure was €8.3 million. Therefore, there has been an increase in the tax paid.
We need a broader consideration of how we are going to deal with the housing needs that are so clearly there. I believe the Deputy acknowledges that in order to meet the housing needs which are only growing, the private sector must play a role. Part of how the private sector will do that is by allowing the savings and pensions in other parts of the world to be invested in providing homes here in Ireland.
We do need to deal firmly with tax compliance issues, as has been done, and we need to find ways by which more homes can be built.
The Minister has been very selective in the years he quoted in relation to taxation.
The Minister knows well that the tax decreased. In fact, he said that there was aggressive behaviour to avoid tax. The purpose of the review conducted by Revenue was to look at how those loopholes could be shut down. Has there been any action on foot of that review, the results of which have not been published? Will the Minister be taking action? In 2017, the sector was much smaller and, of course, was paying less tax. This is a selective use of data.
Tá brón orm. I was only reading out a base figure in the interests of time. Let me be non-selective and read out all the figures for each year since 2017. Those figures are: €8.3 million, €28.2 million, €72 million, €73.8 million, €43.1 million, €37.6 million and €31.8 million, respectively. In recent years-----
Exactly. They have halved.
-----we have seen it at that figure. This is the reason Revenue instigated the compliance intervention that it did. I have made changes. I did so by means of tax legislation in order to ensure that issues that were being raised with me by Revenue were acted upon, and that happened. As soon as further information becomes available for the sector, it will of course be shared with the Deputy and made public.
