Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I will speak briefly on the section itself and then I will address the issue the Deputy has raised. This section of the Bill amends section 604A of the Taxes Consolidation Act 1997, which provides relief from CGT on the disposal of land and buildings purchased in the period from 7 December 2011 to 31 December 2014 and held for at least four years.

The amendment clarifies that only property which was purchased for full market value, or for 75% of market value when purchased from a relative, may benefit from the relief on disposal. This amendment clarifies rather than alters the qualifying conditions for the relief. The relief was introduced to stimulate active investment in the property market. This amendment serves to reflect the consistently maintained policy position that the relief is only available in relation to properties that were purchased in the relevant period and does not extend to properties that were otherwise acquired in that period, such as properties acquired by way of gift or inheritance. The amendment shall be deemed to have effect on disposals made on or after 1 January 2018, which is the earliest date on which the relief could have applied.

The relief was time limited to properties purchased in the period from 7 December 2011 to 31 December 2014 so no purchase of properties after that time period can benefit from relief. The value of the relief tapers off as it is only available on the portion of the gain that represents the same portion of the gain as seven years bears to the entire period of ownership of such land or buildings. Individuals who purchase property where the purchase met the criteria of the relief at the time of purchase would have a legitimate expectation of availing of the relief at the time of disposal and it would not be appropriate to withdraw the relief at this time. It is a long-established principle that where we make commitments in our taxation code, we honour them. What we are doing in this section is clarifying the interpretation of the legislation in manner we believe is consistent with the original policy intent of it.