Joan Burton (Dublin West, Labour) | Oireachtas source

I move:

(1) THAT for the purposes of providing for the refund of appropriate tax paid on deposit interest earned by first-time purchasers Chapter 4 of Part 8 of the Taxes Consolidation Act 1997 be amended by inserting the following section after section 266—

“Repayments of appropriate tax to first-time purchasers

266A. (1) In this section—

‘first-time purchaser’ means a person, being an individual who, at the time of a relevant purchase, has not, either individually or jointly with any other person or persons, previously purchased or previously built directly or indirectly on his or her own behalf any other dwellinghouse or apartment;

‘relevant purchase’ means the conveyance of a dwellinghouse or apartment, on or after 14 October 2014 and prior to 31 December 2017, into the name of a first-time purchaser for use as his or her place of residence;

‘relevant savings’ means so much of the aggregate amount at any time of any relevant deposits held in the name of a first-time purchaser, individually or jointly with another first-time purchaser, as does not exceed 20 per cent of the amount of the consideration paid in respect of the relevant purchase by the first-time purchaser;

‘relevant savings interest’ means relevant interest paid, at any time in a period of 48 months ending on the date of the relevant purchase by a first-time purchaser, to the first-time purchaser in respect of relevant savings.

(2) Notwithstanding section 261(b), appropriate tax which—

(a) has been deducted from relevant savings interest paid to a first-time purchaser, and

(b) would not otherwise fall to be repaid under this section or any other provision of the Tax Acts,

shall be repaid to a first-time purchaser on the making of a claim by the first-time purchaser to the Inspector in that behalf.”. (2) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

Financial Resolution No. 2 provides relief from deposit interest retention tax, DIRT, on funds used by first-time buyers to purchase a dwelling house or apartment for their private occupation from savings built up over a maximum period of four years. DIRT applies at the rate of 41% and is deducted at source by deposit takers, including banks, building societies, credit unions and the Post Office Savings Bank, from interest paid or credited on the deposits of Irish residents. The relief will apply from budget night and will provide a measure of assistance to first-time buyers in meeting the new loan to value rules which the Central Bank has announced will, subject to the completion of a consultation process, be introduced from 1 January 2015.

A first-time buyer is an owner occupier who has never been an owner occupier or part owner occupier of a residential property in Ireland or elsewhere. The relief is confined to DIRT which was paid on savings held in the name of the first-time buyer that are used towards the purchase of a home, up to a maximum of 20% of the purchase price of that home. Relief will apply to DIRT paid in the four years prior to the year of purchase. The scheme will apply in the years 2015, 2016 and 2017.

The amendment will insert a new section 266A into the Taxes Consolidation Act. The section will provide for repayment of DIRT suffered at any time in the 48 months prior to the conveyance of the home, on savings of up to 20% of the price of a house or apartment purchased by a first-time buyer for use as his or her place of residence. The scheme is being brought in by way of financial resolution and will have effect from today.

The new Central Bank regulations are currently out for consultation and the Central Bank will make a decision in this regard subsequent to this legislation. The relief will provide a support to first-time buyers in building up a deposit to buy their first home by providing relief on the DIRT on any deposit interest they have received as a consequence of building up savings for the purchase of the property.

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