Róisín Shortall (Dublin North West, Labour)
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Question 279: To ask the Minister for Finance the number of student accommodation developments which have been granted section 23 type tax relief each year since the inception of this scheme; if he will provide details of the number of such units approved by each of the third level colleges each year for the same period; the manner in which student use is verified on an ongoing basis; the value of the tax foregone to the State in each of these years; and if he will make a statement on the matter. [28070/06]

Róisín Shortall (Dublin North West, Labour)
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Question 280: To ask the Minister for Finance if he will provide information on the number of student accommodation developments which have been granted section 23 type tax-relief each year since the inception of this scheme; if she will further provide details of the number of such units approved by each of the third level colleges each year for the same period; the manner in which student use is verified on an ongoing basis; if he will estimate the value of the tax foregone to the State in each of these years; and if he will make a statement on the matter. [28085/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 279 and 280 together.

I am informed by the Department of Education & Science that as at 31st December 2005, in excess of 5,500 Section 50 student accommodation units have been certified by the Department of the Environment, Heritage and Local Government since the inception of the scheme. Data relating to the number of Section 50 units approved by each third level college is not readily available.

As regards the manner in which student use (as required by this scheme) is verified on an ongoing basis, I am informed that there are no figures available of the proportion of the 14,000 or so Revenue audits carried out in 2005 that looked specifically at claimants to relief for the construction of student accommodation. Revenue are aware that a number of such claims were examined in the normal course of audit in 2005 and that, in those cases examined, there was no evidence to suggest that the guidelines as regards student use were not complied with or that the relief had been abused.

However, Revenue have noted recent newspaper reports of claims made by the Union of Students in Ireland that some "Section 50" apartments are being let to non-students during college terms. I am informed that Revenue have followed up with the person making the claim and will be meeting the USI shortly to discuss their concerns. If there is evidence of abuse in this area, I am assured that Revenue will take appropriate action.

As regards the value of the tax foregone from section 50 relief, the Deputy will be aware that reference to this relief is included in a report by economic consultants INDECON entitled "Indecon Review of Property-Based Tax Incentive Schemes" which was prepared in 2005 and published in February 2006. This report was commissioned by the Department of Finance and is available on the Department's website. It includes an estimate of the aggregate gross tax foregone of €214m and other information the Deputy may find useful.

I should explain that for the tax year 2003 and earlier years, claims for section 50 relief were aggregated in tax returns with other claims and could not be distinguished from the reliefs claimed in respect of different schemes. Accordingly, the specific information on costs for 2003 and earlier years is not available to Revenue. Provisions were included in the Finance Act 2004 to allow this data to be obtained separately for the tax years 2004 et seq.

Based on the information that has been received and collated to date in respect of the tax year 2004, I am informed by the Revenue Commissioners that a total of approximately €180 million was included in the relevant income tax returns for that year as section 50 claims. This figure would correspond to a maximum Exchequer cost for 2004 of some €75 million in terms of income tax forgone. These figures are preliminary estimates and may change as further returns are processed. I should also point out, however, that Revenue are concerned at preliminary indications that in some instances the new, separately categorised data on property incentives may not have been correctly entered on the 2004 Income Tax returns. Revenue is engaging with the tax practitioner bodies to draw attention to these deficiencies and to rectify them. Revenue has also increased awareness among its own staff involved in processing tax returns of the need to ensure, through closer examination of the returns, that they are correctly completed.

Data for the tax years 2005 and 2006 is not yet available as the income tax returns for those years are not due for filing until October 2006 and October 2007 respectively.