Simon Harris (Wicklow, Fine Gael) | Oireachtas source

This amendment relates to reliefs sought from local property tax relating to properties which are mortgaged and where there are mortgage arrears or mortgage restructuring arrangements in place. The Finance (Local Property Tax) Act of 2012, as amended, provides for reliefs from LPT in such circumstances, whereby a person may opt to defer or partially defer payment of the tax.Where a person qualifies for a full deferral, 100% of the liability can be deferred. Where a person qualifies for partial deferral, 50% of the liability can be deferred and the balance of 50% of the tax must be paid. Relief may apply under one of three separate categories: income threshold for individuals whose income is under a certain limit; personal insolvency where a debt settlement or personal insolvency arrangement has been formally agreed with the Insolvency Service of Ireland; and hardship grounds. Where a person does not qualify for a deferral under the other categories and has had both an unexpected and unavoidable significant financial loss or expense, as a result of which they cannot pay the local property tax, LPT, without causing excessive financial hardship, that person can apply for a full or partial deferral. Where the deferral criteria are met, liable persons can opt to defer the full LPT until financial circumstances improve or the property is sold, whichever is first.

Conditions for deferral of the charge specify that the residential property must be the sole or main residence of the person. Where their estimated gross income from all sources does not exceed €15,000 for a single person or €25,000 for a couple during the year covered by the return, they will be eligible to apply for a full deferral of the LPT charge. In addition, for income-stressed owner occupiers who have an outstanding mortgage, an adjusted gross income limit will apply. In these cases, the income thresholds of €15,000 or €25,000 may be increased by 80% of the annual mortgage interest payments.

It is important to make clear that this is not an exemption from the LPT. Interest of 4% per annum, half of the normal Revenue interest rate, is charged on the deferred amount and it does remain a charge on the property until discharged. Any amount deferred will, however, be a relatively small part of the overall value of a property, even where the deferral lasts for a number of years. Owner occupiers may be eligible to apply for a partial deferral where the gross income from all sources is less than €25,000 in the case of a single person and €35,000 in the case of a couple.

I do not want to use up the Senators' time. I am satisfied that the provisions which are in place, which give the Revenue Commissioners scope to permit deferrals in cases of hardship, are sufficient to target the cases in need. For that reason, and given that to extend provision for deferral or exemption from the tax in the manner suggested by the Senator's amendment would decrease the yield and would, in return, require others to pay a higher rate of tax to make up for that loss, I am not persuaded to accept the amendment.