The help-to-buy scheme announced in budget 2017 is an income tax incentive measure designed to assist first-time buyers with the deposit required to purchase or self-build a new house or apartment to live in as their home. With a view to increasing the supply of new housing and stimulating demand, the relief is already available in respect of new builds. In the July 2020 stimulus plan, the scheme was amended so that the level of support available to first-time buyers was increased to the lesser of €30,000, up from …

I thank the Senators for their recommendations Nos 6 and 7. They are seeking reports on the following issues: increasing the standard rate cut-off point to €45,000 and to €50,000, and the introduction of a 30% income tax rate. The Senators will be aware of the programme for Government commitment, which states: From Budget 2022 onwards, in the event that incomes are again rising as the economy recovers, credits and bands will be index linked to earnings. This will be done to prevent an increase in the real burden of…

The report I referred to, the personal tax review, was published on budget day in October. It has a whole chapter on the option of a third rate of income tax and goes into quite some detail on the issues that arise, the policy considerations, the costings and so on. To summarise, among the issues that would need to be considered is that of cost. If there was to be a third rate of income tax, the width of the band would need to be at least €5,000, or probably considerably more. The cost of implementing that would ha…

In my budget address, I acknowledged the challenges that we face with regard to housing, and that it remains a top priority for Government. As part of the response, to assist renters, I announced an increase of the rent tax credit to €750. This is to assist those renters in the private rental sector with the affordability of their rent. The credit will continue to be available until the end of 2025. Eligibility for the credit is also being extended to parents who pay for their student children’s rental accommodatio…

Senator Gavan is requesting a report on the introduction of mortgage interest relief for principal private residences. The relief proposed by the Senator would be equivalent to 30% of the difference in interest paid in the relevant month relative to the interest rate charged in 2022, capped at a maximum benefit of €1,500 per household for the duration of the scheme or for a period of 12 months, whichever is the lesser. It is also proposed that the relief would be applied at source. However, it is not clear when the…

I thank the Senator. With regard to the VAT compensation fund for charities, the Senators will be aware I announced my intention in budget 2024 to increase the size of the fund from €5 million to €10 million. The background to the scheme is that it was originally introduced in budget 2018 to reduce the tax burden on charities and partially compensate them for the VAT incurred in delivering on their charitable purpose. Under the scheme, charities are entitled to claim a refund of a proportion of their VAT costs base…

I thank Senators for their recommendations. The purpose of the residential premises rental income relief is to provide for a new tax incentive for small-scale landlords. This measure is specifically targeted at attracting and retaining small-scale landlords in the private sector. The purpose of this relief is to support the continued participation of small-scale landlords in the rental market, an objective being progressed through Housing for All, the Government’s housing plan to 2030. Landlords are an essential fe…

A new tax incentive was introduced in Finance Act 2022 for small-scale landlords who undertake retrofitting works while the tenant remains in situ , which has the aim of retaining small-scale landlords in the private rental sector as well as encouraging retrofitting of rental properties. This measure is provided for in section 97B of the Taxes Consolidation Act 1997. The provision is intended to provide for a deduction of certain retrofitting expenses incurred by landlords on rented residential properties in calcul…

In my budget address I acknowledged the challenges we face in relation to climate. The finance Bill provides for a number of climate-related tax measures including the enhancements to the tax relief available to qualifying individuals in respect of excess electricity from domestic microgeneration that is supplied to the grid. This tax measure is intended to remove a barrier for entry for those who engage with the clean export guarantee scheme. This is a scheme which introduced an obligation on suppliers to offer th…

I thank Senator Ruane for the recommendation. As Senators are aware, Ireland operates an exempt, exempt, tax, EET, system. This means that contributions to pensions are exempted from income tax, subject to age-related percentage and income limitations. Pension fund gains are exempted from income tax, but income from pension drawdown is taxed. Data is available in relation to the Exchequer cost of tax relief for pensions. This data is publicly available and included in Revenue's publication on the cost of tax expend…

It is important to put on the record what is happening in this Bill in relation to section 481 this year. As I announced on budget day, I am increasing the cap on qualifying expenditure on audiovisual productions from its current level of €70 million to a new cap of €125 million. This change has long been sought by the sector. The increase will support the continued development of the creative film sector and will ensure that Ireland remains an attractive location to produce high-quality films and television series…

I thank Senator Ruane for speaking to these recommendations. Recommendation No. 20 requests a report on a restriction of loss relief for banks. As Senators are aware, loss relief for corporation tax is a long-standing feature of the Irish corporation tax system and a standard feature of corporation tax systems in most OECD countries. It recognises that a business cycle runs over several years and that it would be unfair to tax income earned in one year and not allow relief for losses incurred in another. There have…

I thank both Senators. The recommendation seeks the preparation of a report on the revenue that would be raised from, and the distributional impact of, a wealth tax of 1% on all households with assets over €10 million within six months of the passing of this Bill into law. As Senators from all sides of this House will be aware, wealth can be taxed in a variety of ways, many of which are already levied in Ireland. These include capital gains tax and capital acquisitions tax, which are, in effect, taxes on wealth, in…

I thank Senator Gavan for this recommendation, which proposes a reduction in the current rate of mineral oil tax applied to kerosene used for non-propellant purposes, as well as further deviations from the proposed rates of mineral oil tax applying to other fuels. I acknowledge the impact of fuel prices on the current cost-of-living crisis and welcome the discussion of this important matter today. I am happy to address the recommendation that has been made by the Senator. The Government is very aware of the impact …

I thank the Senator Doherty. As she will be aware, this finance Bill provides for the application of the zero-rate of VAT to electronic books, or ebooks, and audiobooks from 1 January 2024. There is no requirement in the amendment that an electronically supplied book or audiobook must have a printed equivalent to benefit from the zero-rate of VAT. A book or audiobook that is published only in digital or electronic format will also attract the zero-rate of VAT. It should be noted that it was not possible to make thi…

As the Senators will be aware, the small gift exemption is an annual capital acquisitions tax, CAT, relief available to all recipients of gifts. This means a person can receive a gift to the value of €3,000 free of CAT. For example, a parent may give a gift up to the value of €3,000 to a child or, indeed, anyone else, each calendar year without any CAT arising. Two parents can make gifts of €3,000 each to a child, resulting in a gift to the value of €6,000 in any year free of CAT. It should be noted that there is n…

I thank both Senators for their contributions and I assure them that tackling vacancy is a priority for this Government. It is appropriate that every available lever is deployed to incentivise the use of existing housing stock across the country. This includes measures to deter vacancy alongside supportive measures such as grants. For this reason, I announced in the budget that the rate of the vacant homes tax will increase to five times the property’s existing LPT rate. The increase will apply to the chargeable pe…

The residential zoned land tax, RZLT, is a new tax introduced in the Finance Act 2021. It seeks to increase housing supply by encouraging the activation of development on lands that are suitably zoned and appropriately serviced. It is important to note that to come within the scope of the RZLT, farmland must be both zoned for residential use and serviced. Farmland that is zoned for residential use but not currently serviced is not within the scope of the tax and will only come within its scope should the land becom…

Both of these recommendations pertain to the defective concrete products levy, DCPL, but they have separate purposes. I will speak on each of those purposes in turn. The effect of Senator Gavan's first recommendation would be to eliminate the levy, which was introduced through section 99 of the Finance Act 2022 and only came into effect on 1 September this year. It is important to underline the purpose of the levy. It is intended that the revenue from it will contribute towards offsetting the cost to the State aris…

The Senator will be aware that the Government is committed to tackling climate change and decarbonising the economy by 2050, and is therefore very much aware of the challenges that subsidies pose to our collective effort to disincentivise fossil fuels. The programme for Government, the climate action plan and the Climate Action and Low Carbon Development Act form a broad policy and legislative framework for moving away from fossil fuels to renewable energy and alternative fuels and technology. However, it is recogn…