Written Answers Nos. 190-207
190. Deputy Peadar Tóibín asked the Minister for Finance the average length of time between a person applying to the Motor Insurers Bureau of Ireland, MIBI, for assistance and the payout of that assistance; the number of persons on an annual basis which avail of assistance from the MIBI each year; the average value of the assistance; the total cost of all insurance payouts on an annual basis. [26941/16]
Amharc ar fhreagraThe MIBI was established by agreement between the motor insurance industry and the Minister for Local Government in 1955. Later agreements were made with the Minister for Transport. The current agreement between the MIBI and the Minister for Transport, Tourism and Sport dates from 2009 and is in compliance with the requirements of consolidated EU Motor Insurance Directive 2009/103/EC relating to insurance against civil liability in respect of the use of motor vehicles, and the enforcement of the obligation to insure against such liability.
The Department of Transport, Tourism and Sport has informed me that the MIBI is a private company and that that Department has no role in the management of that company.
The issues raised by the Deputy are operational ones for the MIBI. The Department of Transport, Tourism and Sport has suggested that the Deputy may wish to contact the MIBI directly with regard to his questions. They can be contacted at Motor Insurers' Bureau of Ireland, 5 Harbourmaster Place, IFSC, Dublin 1, D01 E7E8. Telephone (01) 6769944 or emailinfo@mibi.ie.
192. Deputy Michael McGrath asked the Minister for Finance the timeframe for the sale of the State's share in a bank (details supplied); if that timeframe has been revised in view of Brexit; and if he will make a statement on the matter. [26955/16]
Amharc ar fhreagraAs the deputy is aware, the State has a shareholding of 99.9% in AIB. This shareholding is a valuable asset to the State and it is the Government's intention that the State would exit this and our other banking investments in a measured and careful manner. As I have indicated on a number of occasions, my primary objective in the disposal of these assets will be recovering the maximum amount of money for the Irish taxpayer.
I have indicated in the past that an IPO is likely to be the optimal route to recouping value from our investment in AIB. At the beginning of this year officials in my Department appointed an Independent Financial Adviser, following a tender process, to assist with analysis and exit planning and much of this initial preparation has now been completed. However, given the complex nature of an IPO process, the need to access certain IPO 'windows' and the recent volatility seen in stock markets, I would now deem it more likely that a market event involving AIB would occur in 2017, rather than 2016.
I would acknowledge that the bank is now ready to participate in a market event at a time of my choosing and welcome the continued strong performance of AIB, which has demonstrated sustainable profitability and capital generation over a number of consecutive reporting periods. I would also note the recent comments made by the bank's chairman indicating that AIB may be approaching the time when the board will be in a position to consider the payment of a prudent dividend, in consultation with their regulator, which would contribute to a strong investment case for the bank.
While Brexit is obviously a significant factor behind the weakness and volatility we have seen in banking equities this year, wider concerns around the future of banking business models, a prolonged period of low and negative interest rates, as well as uncertainty around the strength of global economic growth, are also at play. Clearly in order for us to proceed with an IPO, we would need to be satisfied that the market is prepared to put a fair and reasonable value on the business, bearing in mind its current performance and future prospects along with the outlook for the Irish economy. As part of their day-to-day role, officials in my Department will continue to monitor market conditions and keep all options relating to AIB and our other banking investments under review.
193. Deputy Clare Daly asked the Minister for Finance further to Parliamentary Questions Nos. 210 and 226 of 16 September 2016, the number of persons who own properties, respectively, in ranges (details supplied); and the number of multiple property owners in each of the ranges for each of the years 2013 to 2015, inclusive. [26961/16]
Amharc ar fhreagra194. Deputy Clare Daly asked the Minister for Finance further to Parliamentary Question Nos. 210 and 226 of 16 September 2016, the number of the 50 persons who own 201 or more properties who are natural persons; the number which are companies or investment vehicles; and the number of those companies which fit the definition of vulture fund. [26962/16]
Amharc ar fhreagraI propose to take Questions Nos. 193 and 194 together.
In relation to Question 26961/16, I am advised by Revenue that a breakdown in the ranges requested by Deputy cannot be provided due to confidentiality considerations. The available information in respect of certain ranges of property numbers is as shown in the table. The Deputy may wish to note that the estimated number of liable persons owning more than 200 properties is between 40 and 50 in each of the years shown. These figures are provisional and subject to change.
|
Number of Liable Persons |
|||
|
Number of Properties Between |
2013 |
2014 |
2015 |
|
200-300 |
15 |
14 |
11 |
|
301-400 |
11 |
11 |
11 |
|
401-500 |
Less Than 10 |
Less Than 10 |
Less Than 10 |
|
Greater than 500 |
12 |
14 |
14 |
In relation to Question 26962/16, I am further advised by the Revenue Commissioners that the vast majority of liable persons with properties in excess of 201 are legal entities such as companies. However, Revenue have no basis on which to differentiate those which might be described as "Vulture Funds" as this is not a recognised classification on tax records.
195. Deputy Clare Daly asked the Minister for Finance if his Department, the Revenue Commissioners or NAMA collect and collate data on those entities which purchase multiple residential properties from NAMA and which subsequently let those properties to local authority tenants through any of the local authority rental schemes available (details supplied); the number of local authority tenants to which each entity rents units; the cost to the Exchequer per entity; and the number of units as a percentage of the total number of rental units available in any given time period, quarterly, yearly and so on. [26963/16]
Amharc ar fhreagraMy Department does not collate such information. I am also advised by NAMA and the Revenue Commissioners that those bodies, likewise, do not collate this data. Income tax returns submitted to Revenue in respect of rental income are not furnished in a manner that would enable the prior ownership of rental properties to be identified, nor do they provide information on the tenants.
196. Deputy Ruth Coppinger asked the Minister for Finance the amount that could be raised by restoring stamp duty on commercial property transactions to the previous rate of 6%; and if he will make a statement on the matter. [26989/16]
Amharc ar fhreagra197. Deputy Ruth Coppinger asked the Minister for Finance the amount that could be raised by increasing stamp duty on commercial property transactions to 10%. [26990/16]
Amharc ar fhreagra198. Deputy Ruth Coppinger asked the Minister for Finance the amount that could be raised annually by increasing stamp duty on shares to 4% or 5%. [26991/16]
Amharc ar fhreagraI propose to take Questions Nos. 196 to 198, inclusive, together.
I am advised by Revenue that the projected yields from increasing the current rate of stamp duty on commercial property from 2% to 6% or 10% could be in the region of €468 million and €936 million respectively.
The projected yield from increasing the current rate of stamp duty on shares from 1% to 4% or 5% could be in the region of €1,320 million and €1,760 million respectively.
199. Deputy Ruth Coppinger asked the Minister for Finance the amount of rental income declared to the Revenue Commissioners for each year since 2011. [26992/16]
Amharc ar fhreagra200. Deputy Ruth Coppinger asked the Minister for Finance the amount of revenue raised from taxation of rental income for each year since 2011. [26993/16]
Amharc ar fhreagraI propose to take Questions Nos. 199 and 200 together.
I am informed by Revenue that the gross rental income (residential and commercial) declared on Income Tax returns is in the order of €4,573 million for 2011, €4,446 million for 2012, €4,301 million for 2013 and €4,322 million for 2014, the latest year for which returns are available. The rental income declared in respect of Corporation Tax is €651 million for 2011, €645 million for 2012, €675 million for 2013 and €683 million for 2014.
Regarding Question No. (Ref: 26993/16), I am advised by Revenue that as rental income is aggregated with all other incomes for the purposes of either Income Tax or Corporation Tax calculations, it is not possible to identify the total tax intake from rental income alone.
201. Deputy Ruth Coppinger asked the Minister for Finance his Department's assessment of the likely economic and social impact of a collapse in commercial real estate values in view of the statement in the latest European Commission report on Ireland that commercial real estate prices are volatile and a sudden fall in prices could have an adverse effect on the economy. [26994/16]
Amharc ar fhreagraDevelopments in the commercial real estate market, and the residential real estate market for that matter, are of significant importance for the economy and financial stability. The Commission's analysis of the sector follows strong growth in commercial real estate activity in recent years, with prices having recovered in the region of 55 per cent since the trough in the first quarter of 2013. As is well documented, commercial real estate prices are subject to pronounced cyclical movements and it is clearly important that developments in the sector are continually monitored.
In this regard, separate analyses on the Irish commercial real estate market included in the European Commission's Post-Programme Surveillance Spring 2016 Report, and the IMF Financial System Stability Assessment published in July, are inconclusive as to whether prices are over- or undervalued.
In response to the potential impact of a sudden drop in commercial real estate prices, the economy would be affected through its negative impact on real estate developers and construction activity. However, growth has been much more balanced across economic sectors since the recovery so the economy would be much less exposed to a decline in activity in the construction sector compared to the experience during the financial crisis.
As regards its impact on the banking sector, investment in the commercial real estate sector has been much more diversified both in terms of the type and origin of funds. As indicated in the Central Bank's latest Macro Financial Review, the primary source of the investment in Irish commercial real estate market has been from international private equity funds, REITs and other financial vehicles since 2012. Domestic banks exposure to the commercial real estate market has been limited for the most part to outstanding loans drawn down prior to the financial crisis.
202. Deputy Ruth Coppinger asked the Minister for Finance the value of outstanding commercial property loans owed to Irish banks; and the Irish banks in which the State has a shareholding. [26995/16]
Amharc ar fhreagraThe Central Bank of Ireland publishes a wide variety of statistics, the data is however, provided on an aggregate basis and does not include loan exposures outside this jurisdiction. Table A.14: Credit Advanced to Irish Resident Private-Sector Enterprises relates to the Deputy's question. A.14 Outstanding Tab (Item 11.2 "Property investment/development of commercial real estate) provides data on loans relating to the buying and/or developing of land zoned for commercial property.
The overall outstanding amount of commercial property loans reported by the Central Bank at end June 2016 was €9,345 million.
It should be noted that projects where in excess of 75 per cent of floor space is commercial real estate are also included here. This would also include funds advanced to counterparties whose primary economic activity was not in real estate, land and development, but who are using the funds advanced for this purpose. Lending related to both green field and brown field commercial real estate sites are included here.
It is also important to note that this data relates to all credit institutions resident in the Republic of Ireland. A full list of which is available at http://www.centralbank.ie/polstats/stats/cmab/Documents/Credit%20Institutions%20Resident%20in%20the%20Republic%20of%20Ireland.pdf.
In respect of the Irish banks in which the State has a shareholding, loan exposures can be found published in each of the institutions financial statements. The published data is classified or categorised differently by each institution and unlike the Central Bank data includes loans by their overseas operations. Links to the relevant financial statements and the relevant pages are detailed below.
AIB-H1 2016
https://investorrelations.aib.ie/content/dam/aib/investorrelations/docs/resultscentre/2016-half-yearly-financial-report.pdf
Relevant page - 58
PTSB H1 2016
http://www.permanenttsbgroup.ie/~/media/Files/I/Irish-Life-And-Permanent/Attachments/pdf/2016/ptsbgh-half-year-report.pdf ?
Relevant page: Note 13 Page 64
BOI-H1 2016
https://investorrelations.bankofireland.com//wp-content/assets/BOI-Interim-Report-2016.pdf
Relevant page 63
203. Deputy Billy Kelleher asked the Minister for Finance if he is giving consideration to the call by the Irish Dental Association to see marginal rate tax relief returned to the med 2 scheme to alleviate the burden on patients facing costly dental treatments such as orthodontics, crowns, endodontic and prosthodontic treatments and so on; if he has estimated the likely improvements in oral health as well as the revenue benefits associated with the restoration of marginal rate relief; and if he will make a statement on the matter. [27055/16]
Amharc ar fhreagraDental expenses, including those listed by the Deputy, may qualify for tax relief under section 469 of the Taxes Consolidation Act 1997, which allows relief for health expenses incurred for the provision of health care. With effect from 1 January 2009, relief in respect of qualifying health expenses, with the exception of relief in respect of nursing home expenditure, is granted at the standard rate of tax. Prior to that date, the relief was available at the taxpayer's marginal rate.
Standard rating health expenses relief makes the tax system fairer and more equitable as it provides the same value benefit to all taxpayers with sufficient income against which to claim relief. Previously the system of marginal rate relief allowed higher-income individuals paying the higher rate of income tax to claim a greater relief than was available to lower-income taxpayers liable to tax at the standard rate only. The standard-rating of relief for health expenses also brings the relief more in line with other reliefs such as those for medical insurance and third level fees, which are also granted at the standard rate of tax only. However I would point out that these other reliefs mentioned have a cap on the maximum amount on which relief can be claimed whereas no cap applies on the maximum value of health expenses that can qualify for relief.
In my view the availability of relief at the standard rate of income tax for health expenses, including qualifying dental expenses, is the most appropriate use of limited fiscal resources. I therefore do not intend changing the policy in this regard at this time.
204. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which his Department can monitor the situation affecting those with mortgage arrears, with particular reference to the need to ensure that family homes are protected to the greatest extent possible and that borrowers who continue to make payments within their capacity are facilitated into the future; and if he will make a statement on the matter. [27183/16]
Amharc ar fhreagraThe Deputy will be aware that my officials have since August 2013 published monthly returns on mortgage arrears levels in the six main banks representing approximately 90 per cent of the market. The data clearly shows that the number of accounts with mortgage arrears on primary dwelling homes (PDH) is declining. Of course the Central Bank quarterly Residential Mortgage Arrears & Restructures data, provides a more comprehensive analysis of the mortgage arrears situation, reporting as it does on the total mortgage market, and confirms the ongoing and continuous decline in the level of accounts in arrears for more than 90 days. More detail on the most recent publication is given below.
The Deputy will also be aware that the Action Plan For Housing and Homelessness sets out how the Government plans to meet the challenging commitments made in the Programme for a Partnership Government in respect of dealing with homelessness, including how it will address the high level of mortgages currently in arrears for more than two years. Implementation of this plan is being overseen by the Cabinet Committee on Housing and Homelessness. One action on mortgage arrears relates to a commitment to work with the Central Bank to amend the Code of Conduct on Mortgage Arrears to include an obligation on providers of mortgage credit to provide a range of sustainable arrears solutions. I have written to the Governor of the Central Bank in this regard to request that an assessment be undertaken of the range of available sustainable restructure solutions offered by banks and non-bank entities. I have asked that this assessment should consider in particular how the available options may impact on the distressed borrower's capacity to remain in their primary residence. The outcome of the assessment will be important in determining next steps in relation to the Action Plan for Housing and Homelessness commitments in respect of the amendment of the Code of Conduct on Mortgage Arrears.
The Central Bank of Ireland's (The Central Bank) Code of Conduct on Mortgage Arrears (CCMA) provides a strong consumer protection framework to ensure that each borrower who is struggling to keep up mortgage repayments is treated in a timely, transparent and fair manner by lenders. The CCMA is a statutory code under section 117 of the Central Bank Act 1989 and can be found at: http://www.centralbank.ie/regulation/processes/consumer-protection-code/Pages/codes-of-conduct.aspx. The CCMA recognises that it is in the interests of borrowers and lenders to address financial difficulties as speedily, effectively and sympathetically as circumstances allow.
The CCMA also requires lenders to have an appeals process in place to enable a borrower appeal a decision by a lender, including where the borrower is not willing to enter into an alternative repayment arrangement or where the lender declines to offer an alternative repayment arrangement. The appeals procedure must inform the borrower of his/her right to refer the matter to the Financial Services Ombudsman.
The Central Bank monitors compliance with consumer protection requirements on an ongoing basis through themed inspections, reviews and research, mystery shopping and advertising monitoring and it continues to engage with lenders to ensure compliance with the CCMA.
The Deputy is no doubt aware that the latest Central Bank statistical bulletin, published on 13th September, on residential mortgage arrears presents data to end-June 2016. This release shows the continuing improvement in the level of mortgage accounts with associated arrears, for example, 89 per cent of PDH mortgage accounts have no mortgage arrears. The number of mortgage accounts for principal dwelling houses (PDH) in arrears continued to fall in Q2 2016, marking the twelfth consecutive quarterly decline. All maturity categories of arrears, including the over 720 days category, declined in Q2. The 720+ days category recorded a fourth consecutive decline, having fallen for the first time in Q3 2015, and 120,614 PDH mortgage accounts were classified as restructured at end-June. Of these restructured accounts 88% were deemed to be meeting the terms of their current restructure arrangement; the highest level since the series began.
It is very welcome that the numbers in mortgage arrears have continued to decline across the various maturity categories and those in arrears for more than two years have declined for the fourth consecutive quarter. However, there are still large numbers with long-term arrears, despite the various borrower supports that have been put in place. Therefore, it is important that we now concentrate our efforts to ensure that those who remain in arrears engage with their lender to resolve their difficulties. I understand that this will be a major focus for the Mortgage Arrears Resolution Service being established on foot of the Action Plan for Housing and Homelessness.
205. Deputy Róisín Shortall asked the Minister for Finance the current VAT rate charged for the repair of goods, for example, white goods, bicycles and so on; and his estimate of the cost of reducing the VAT rate charged to the next lowest bracket. [27199/16]
Amharc ar fhreagraThe VAT rating of goods and services are subject to the requirements of EU VAT law with which Irish VAT law must comply. The VAT Directive provides that Member States may apply either one or two reduced rates to certain goods and services listed in Annex III of the Directive. In addition, the Directive allows for historic VAT treatment to be maintained under certain conditions on certain goods and services not provided for in Annex III.
Ireland currently operates two lower rates of VAT 13.5% and 9% as permitted by the Directive. The VAT Rate for the repair of goods is the reduced rate 13.5% and comes under the historic VAT treatment which is subject to the restriction that it cannot be reduced below 12%. Therefore, it cannot be moved to the next lowest VAT bracket of 9%.
The carrying out of minor repairs to bicycles, shoes or leather goods, clothing or household linen are however specifically listed in Annex III of the Directive and therefore can be reduced to 9%.
I am informed by Revenue that it is not possible to estimate the cost of reducing the VAT rate on these specific services. This is due to the fact that VAT returns submitted to Revenue do not identify specific transactions or activities.
206. Deputy Michael McGrath asked the Minister for Finance if beneficiaries are entitled to avail of the principal dwelling house exemption in respect of the property they legitimately lived in all their life with regard to the application of inheritance tax law and in the event where a person inherits two residential properties at the same time following the death of a parent having previously not owned any residential property; and if he will make a statement on the matter. [27212/16]
Amharc ar fhreagraI am advised by Revenue that, under section 86 of the Capital Acquisitions Tax Consolidation Act 2003, gifts and inheritances of dwelling-houses can qualify for an exemption from the payment of Capital Acquisitions Tax (CAT) once certain conditions are satisfied. This relief is referred to as the "dwelling house exemption".
One of the qualifying conditions for the dwelling house exemption is that the individual receiving the gift or inheritance (the "beneficiary") must have occupied the dwelling house as his or her only or main residence for the period of 3 years immediately preceding the date of the gift or inheritance. Another condition is that the beneficiary must not have any beneficial interest in another residential property at the date of the gift or inheritance. A beneficiary is treated as having a beneficial interest in another residential property where he or she inherits more than one such property at the same time, whether or not the individual previously owned any such property. Therefore, where two residential properties are inherited at the same time, the beneficiary does not qualify for the dwelling house exemption.
207. Deputy Thomas P. Broughan asked the Minister for Finance the amount of revenue that would be generated by increasing the number of Revenue Commissioners personnel by 200 qualified persons to further robustly target tax evasion and black market activity; and if he will make a statement on the matter. [27258/16]
Amharc ar fhreagraI am advised by Revenue that Revenue's Comprehensive Review of Expenditure 2014 estimated that by increasing audit staffing resources by c.100 staff an additional exchequer yield of €50m per annum could be achieved. On this basis it is estimated that by increasing audit staffing resources by c.200 staff an additional exchequer yield of €100m per annum could be achieved.
It was estimated that by increasing staff on compliance projects such as oils, tobacco and alcohol by 100 could raise €20m per annum. It also estimated that increasing staffing on investigations by 20 staff could achieve exchequer savings of €12m per annum.
On that basis, an increase of 200 staff on audit, compliance and investigation work targeting tax evasion and black market activity could raise between €40m and €100m per annum depending on the mix. In addition, it should be noted that there is a significant deterrent and voluntary compliance effect on behaviour of an effective, risk based compliance programme. The investment in the training and development of a Revenue auditor or investigator can take up to three years, depending on previous relevant experience. Therefore the full additional yield would not be available immediately.
Revenue undertakes a range of risk management interventions to target and confront those who do not comply, including tax evasion and black market activity. The objective is that people are deterred from filing inaccurate returns and from engaging in shadow economy activity and smuggling. The range of interventions has increased in recent years. Interventions include appraisals, aspect queries, profile interviews, assurance checks, enforcement, investigation and prosecutions, as well as audits. The appropriate intervention depends on the relevant risk. The average rate of return on each type of intervention varies depending on the intervention. In some types of interventions to tackle evasion and the black economy, such as enforcement, the focus is on the detection of drugs and fiscal smuggling where the direct exchequer yield is not the immediate objective.
It must also be recognised that Revenue has to prioritise its resources and must, for example, provide service for compliance, by making it easier and less costly to voluntarily comply. The administration of taxes and duties requires a wide range of specialists and experts.
In that context in Budget 2015 and Budget 2016 I provided for an increase of 176 (126 and 50) in additional resources to deal with a wide variety of staffing requirements across audit and compliance functions, debt management functions, international tax, etc. In the context of the upcoming budget I will continue to support Revenue's case for resources and meet the diverse range of challenges facing the organisation.
Revenue appointed over 400 staff from open competitions in 2015, these staff were mainly deployed on Local Property Tax support, International Tax and on compliance interventions. Revenue has appointed over 467 staff to date in 2016 from open recruitment. The recruitment in 2015 and to date in 2016 has been at all levels and across a diverse range of specialist skills areas such as tax and legal professionals, data analysts, economists and information technology experts.
It should be noted that the recruitment of staff and their training and development is addressed as part of an overall workforce planning process in Revenue. The capacity to recruit and develop Revenue staff needs to be addressed in a coordinated fashion.
