Bernard Durkan (Kildare North, Fine Gael)
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Question 237: To ask the Minister for Finance the amount accruing to the Exchequer in the past 12 months from taxation through the construction industry; and if he will make a statement on the matter. [33537/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am informed by the Revenue Commissioners that as the information furnished on tax returns does not generally require the yield from a particular sector or sub-sector of economic activity to be identified, the precise figures of net yield of tax revenues collected in respect of the activities specified in the question cannot be readily identified.

Information can, however, be provided as to the estimated gross amounts of certain taxes paid, that is, before allowing for repayments, by taxpayers in the construction industry. The gross yield of these taxes from the construction industry was estimated to be €3,253 million in 2004, the latest year for which the relevant figures are available.

The taxes in question include internal VAT, excluding VAT on imports; PAYE combined with PRSI from employees and employers; and corporation tax and income tax, non-PAYE. Income tax, non-PAYE, includes direct tax payments received from self-assessed taxpayers and estimated relevant contracts tax attributable to the construction industry but excludes certain "deduction" taxes such as deposit interest retention tax, withholding tax on professional fees and dividend withholding tax, as well as yields from audit and other back duty settlements.

The sector identifier used on the tax records is based on the four digit NACE code Rev. 1, which is an internationally recognised economic activity code system. The NACE codes are not essential for the assessment and collection of taxes and duties and the correct allocation and maintenance of these codes is subject to the limit of available resources. While the accuracy of the NACE codes on tax records is sufficient to underpin broad sector-based analyses, there will undoubtedly be some inaccuracies at individual level. This should be borne in mind when considering the information provided.

The figure provided for the estimated gross yield from the construction industry does not include the yield from activities and businesses in other economic sectors, particularly in the professional services sector, which are related either in whole or in part to the construction sector. An example of these would be architecture, engineering and real estate activities. This factor would have a particularly strong effect on the perceived sector distribution of VAT. VAT is levied on taxable activities, that is, provision of goods and services, and, accordingly, the yield from a vatable activity such as construction, can be spread over more than one NACE code grouping.

Bernard Durkan (Kildare North, Fine Gael)
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Question 238: To ask the Minister for Finance the amount of tax accruing to the Exchequer from the sale of a new house costing €400,000; and if he will make a statement on the matter. [33538/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The sale of a new house will give rise to taxes on the purchaser and seller of the house. The purchaser of a new house may be liable to pay stamp duty and VAT, while the seller of such a house may be liable to income tax, corporation tax or capital gains tax. The status of the purchaser and the seller need to be taken into consideration in computing these taxes, in addition to the type and value of the house.

Where stamp duty is incurred it is normally paid by the purchaser. Purchasers who are owner-occupiers are exempt from stamp duty on new houses where the floor area of the house does not exceed 125 sq m and a floor area compliance certificate has been issued by the Department of Environment, Heritage and Local Government. Where the floor area of the house exceeds125 sq m, stamp duty is charged on purchasers who are owner-occupiers on the site value or 25% of the property value — exclusive of VAT — whichever is the greater, at the rates applicable to second-hand residential property. For investors buying a new house, stamp duty is charged at the rates applicable to second-hand residential property on the full value of the property — exclusive of VAT — regardless of the floor area of the house concerned.

In this respect, a new house valued at €400,000, is exempt from stamp duty for a purchaser who is an owner-occupier. For a new house with a floor area in excess of 125 sq m this is based on the assumption that 25% of the value of the whole property is greater than the site value. Should the site value be greater, the stamp duty treatment may differ and some charge could arise. In the case of an investor purchasing such a house, a stamp duty charge of €21,145 will be incurred. The rate of VAT applicable on the sale of a new house is 13.5%, so the VAT inclusive price of a house sold for €400,000 will include VAT of €47,577. This amount is reduced by the sum the builder or developer is entitled to claim credit in respect of input VAT suffered on material costs etc. The amount of this claim will vary from property to property.

Indirectly, any trading profit from the sale of the house will be liable to either income tax or corporation tax, depending on whether the builder-developer is a sole trader or a company.