Eoghan Murphy
Ceist:5. Deputy Eoghan Murphy asked the Minister for Finance his views on a residential scheme (details supplied). [54746/12]
Amharc ar fhreagraWednesday, 5 December 2012
Ceisteanna (5)
Freagraí scríofa
The interest restriction of 75% applying to residential lettings was introduced in the April 2009 supplementary budget as part of an urgent revenue-raising package aimed at stabilising the public finances. The context in which the 2009 measure was introduced, i.e. the need to stabilise public expenditure, still exists. Under the terms of the EU/IMF Programme of Financial Support for Ireland, the State is committed to further substantial reductions in public expenditure. I am informed by the Revenue Commissioners that a breakdown between rent received from residential property and other types of property is not sought or provided in tax returns. However based on personal income tax returns filed by non-PAYE taxpayers for the year 2010, the latest year for which this information is available, and making certain assumptions about the data it is estimated that the estimated cost of restoring the level at which individuals can claim interest repayments against tax for residential rental properties from 75% back to 100% could be in the region of €112m in a full year. The estimated cost is based on assuming that tax relief was allowed at the top income tax rate of 41% and the figure provided could therefore be regarded as the maximum Exchequer cost in respect of those taxpayers. This figure is subject to adjustment in the event of late returns being filed or where returns already filed are subsequently amended.
As rental income of companies is returned as net of interest on borrowings, the figures for interest are not separately distinguishable and there is, therefore, no basis on which an estimate of the cost in respect of companies can be given. It should be noted that any corresponding data returned by PAYE taxpayers in the income tax return form 12 is not captured in the Revenue computer system. However, any PAYE taxpayer with non-PAYE income greater than €3,174 is required to complete an income tax return form 11. This return is the source of the figure provided in this reply in respect of individuals.