Property Taxation Administration

Questions Nos. 71 and 72 answered with Question No. 67.

Ceisteanna (70)

Seán Fleming

Ceist:

70. Deputy Sean Fleming asked the Minister for Finance the number of persons who occupy residential properties owned by the State or public bodies; the person who determines the market value of such properties; and if he will make a statement on the matter. [18113/13]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Finance (Local Property Tax) Act 2012 (as amended) provides that a liability for Local Property Tax (LPT) will arise where a person owns a residential property on the liability date which will be 1 May 2013 for the year 2013. The 2012 Act provides that the State or other public bodies, including local authorities, will be liable for LPT on their properties in the same way as any other residential property owner, unless the properties in question are used to accommodate people with special housing needs such as the elderly or people with disabilities. As LPT is a self-assessed tax it will be a matter for the property owner to calculate the tax due based on his or her assessment of the market value of the property. In this regard it will be a matter for the relevant State/public body to establish a market value for each property and submit a completed LPT Return in respect of the properties in their ownership. The 2012 Act provides that where local authority owned properties are not exempt from LPT, the market value of any such property will be deemed to fall into the lowest valuation band of zero to €100,000 for the period up to and including 2016. This will result in an LPT charge of €45 per property for 2013 and €90 per year for 2014 to 2016. In addition, section 119 of the 2012 Act also gives local authorities until 1 January 2014 to pay the 2013 tax. In common with other liable persons who own multiple properties, local authorities have until 28 May 2013 to file their LPT Returns.

I am advised by the Office of Public Works (OPW) that it is engaging with the Revenue Commissioners to assess the market value of all those buildings in the State's property portfolio which are or could be considered to be residences for the purposes of the Property Tax. The Valuation Service of the OPW will be responsible for assigning a market value to all such properties under its control judged liable for the tax.

The number of persons who occupy residential properties owned by the State or public bodies is not relevant to the operation of the tax and is not information that Revenue would have.

Questions Nos. 71 and 72 answered with Question No. 67.

Property Taxation Administration

Ceisteanna (73)

Seán Fleming

Ceist:

73. Deputy Sean Fleming asked the Minister for Finance if a person may pay the local property tax by cheque to the Revenue Commissioners/Collector General. [18116/13]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am informed by the Revenue Commissioners that the Collector-General will accept payment by cheque of Local Property Tax (LPT) from owners of a single property. The LPT legislation provides that owners of multiple properties must file their LPT returns and pay their LPT online so cheque payment is not an option for this category of liable persons. In circumstances where a single property owner chooses to pay by cheque, he/she should ensure to complete the LPT Return, attach a cheque for the full amount and send it to LPT Branch, P.O. Box 1, Limerick. I draw the Deputy’s attention to the Single Debt Authority (SDA) option, which Revenue has developed as part of its suite of flexible payment methods designed to make payment of LPT as easy and user friendly as possible. The SDA, which operates like an ‘electronic cheque’, will not be deducted by Revenue from the person’s bank account before 21 July 2013. Any owner of a single property wishing to avail of the SDA option should simply complete the payslip at the bottom of the LPT 1 Return and send it to LPT Branch, P.O. Box 1, Limerick.

Mortgage Interest Relief

Ceisteanna (74)

Bernard Durkan

Ceist:

74. Deputy Bernard J. Durkan asked the Minister for Finance if the Revenue Commissioners may be prepared to accept repayments of €100 per month in respect of overpayment of mortgage interest relief in the case of persons (details supplied) in County Kildare; and if he will make a statement on the matter. [18131/13]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

This is a matter for the Revenue Commissioners who are responsible for the administration of mortgage interest relief through the tax relief at source [TRS] system. I am advised by Revenue that this matter has been ongoing for some time and that the persons in question agreed a repayment schedule in June 2011. In November 2011 the persons contacted Revenue with a view to renegotiating the payment schedule and a revised arrangement was agreed at that time. Given the circumstances of the case Revenue has made direct contact with the persons to further revise the repayment schedule.

Tax Yield

Ceisteanna (75)

Joe Higgins

Ceist:

75. Deputy Joe Higgins asked the Minister for Finance the amount of additional revenue that will be raised for the Exchequer if the corporation tax rate here was raised by the same proportion, that is by 25%, as the increase to the Cypriot corporate tax rate in the original Cypriot bailout plan of 16 March 2013. [18152/13]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am informed by the Revenue Commissioners that the full year yield to the Exchequer, estimated in terms of expected 2013 profits, of increasing the standard rate of corporation tax by 25% from 12.5% to 15.6%, is tentatively estimated on a straight line arithmetic basis to be about €928 million. While this estimate is technically correct it does not take into account any possible behavioural change on the part of taxpayers as a consequence. In terms of an increase in the 12.5% rate, estimating the size of the behavioural effects is difficult but they are likely to be relatively significant. An OECD multi-country study found that a 1% increase in the corporate tax rate reduces inward investment by 3.7% on average. On this basis, it would take only a 2.5% increase in the rate (to 15%) to decrease Ireland’s inward investment by nearly 10%. This assumes the average applies across the board but in fact the effect is likely to be more extreme for Ireland.

The very major importance of maintaining the standard 12.5% rate of corporation tax to Ireland’s international competitive position in the current climate must also be borne in mind. Ireland, like other smaller member states, is geographically and historically a peripheral country in Europe. A low corporate tax rate is a tool to address the economic limitations that come with being a peripheral country, as compared to larger core countries. Ireland’s low corporation tax rate plays an important role in attracting foreign direct investment to Ireland and thereby increasing employment here. Recent research by the OECD also points to the importance of low corporate tax rates to encourage growth.

Further, it would be difficult to justify such a move in the context of Ireland’s stated position that we will not change our corporation tax strategy. Even a marginal change would undermine both our long held stance on this issue and the certainty of business, domestic and international, in our resolve to maintain that position.

Mortgage Arrears Rate

Ceisteanna (76)

Michael McGrath

Ceist:

76. Deputy Michael McGrath asked the Minister for Finance the proportion of residential mortgage holders in arrears of longer than 90 days in which one or both parties to the mortgage are classified as unemployed; and if he will make a statement on the matter. [18164/13]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Central Bank has advised me that it does not publish a breakdown of its quarterly mortgage arrears statistics in the format requested by the Deputy. However, the Deputy may wish to note that the Central Bank commissioned a survey of households with mortgage debt in 2012. The purpose of the survey is to identify any changes in the income and consumption patterns of mortgage holders since they drew down their mortgage. The Central Bank has informed me that the results of this survey are to be published in the coming months and will provide more granular analysis of the specific circumstances of indebted households.

Central Bank of Ireland Properties

Ceisteanna (77)

Michael McGrath

Ceist:

77. Deputy Michael McGrath asked the Minister for Finance the plans being considered for the future use of the headquarters of the Central Bank of Ireland; the timetable for completion; and if he will make a statement on the matter. [18165/13]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Central Bank owns four premises in Dame St, including the landmark Tower Building. It also leases premises in Spencer Dock in the Docklands and Iveagh Court near Harcourt St. It is the intention of the Central Bank to develop disposal proposals for the Dame Street buildings. Due regard will be given to the public interest and maximising the return to the Central Bank in decision making around the future of these properties. The Central Bank will consider all proposals for the future use of the building, taking into account that this is a valuable asset that should give maximum return so that the Central Bank can continue to return a portion of their profit to the Exchequer. The decisions on future use will be informed by the need to balance both the asset value on the Central Banks profit and loss account and taking into account the public interest in the Dame St tower.

Construction on the Central Bank North Wall Quay site is expected to commence in 2014 and the Central Bank is aiming to move in late 2015.

IBRC Staff

Ceisteanna (78)

Michael McGrath

Ceist:

78. Deputy Michael McGrath asked the Minister for Finance if his attention has been drawn to non co-operation by former Irish Bank Resolution Corporation staff with the National Assets Management Agency; and if he will make a statement on the matter. [18166/13]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I have been advised by the Special Liquidators that they have only experienced co-operation and support from employees to date.

Insurance Industry

Ceisteanna (79)

Michael McGrath

Ceist:

79. Deputy Michael McGrath asked the Minister for Finance the current maximum outstanding liability of the State in respect of claims against the Insurance Corporation of Ireland; and if he will make a statement on the matter. [18167/13]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The Deputy should note at the outset that the State no longer has any outstanding liability in respect of claims against the Insurance Corporation of Ireland. In this regard the administrator of Icarom obtained the approval of the High Court on 27 November 2012 for a portfolio transfer of all of Icarom’s insurance liabilities to another regulated entity, EIFlow, in return for a payment of circa €17 million. EIFlow is an EU-regulated company incorporated in Gibraltar and licensed by the Financial Services Commission in Gibraltar, and is controlled by the shareholders of Quest Group Holdings Limited, a company which specialises in the servicing of the run off of insurance and reinsurance portfolios.

Icarom has therefore disposed of its entire insurance business, and there are no remaining outstanding liabilities of the State in respect of claims on the Insurance Corporation of Ireland. As a consequence the administration has been terminated and the company dissolved.

It should also be noted that in completing this transaction the administrator was able to repay to the Insurance Compensation Fund a total of €88,530,782.55.

The Icarom administration was financed by loans from the State, one for IR£100 million in 1985 which was repaid on schedule in 2000, and one for IR£32 (€40.6) million in 1993, which was repaid in 2002, ten years ahead of schedule. Icarom has also benefitted from, inter alia, profits on the sale of the general insurance and life assurance businesses (€135 million), proceeds from a settlement with the Company’s former auditors (€49 million), the settlement of claims for less than their estimated cost (€46 million) and contributions from AIB under a 1992 agreement with the State (€224 million).

Finally, the Deputy should be aware that at the time Icarom was placed in Administration in March 1985, there was great concern about what the ultimate cost to the taxpayer would be. The actual outturn is significantly better than was originally envisaged with both the life assurance and the general insurance businesses continuing to operate under new ownership and approximately €88.5 million now being returned to the State. The only cost to the State is the interest foregone of €20.9m on the 1993 interest free loan of €40.6m.