Written answers

Wednesday, 26 May 2010

Department of Finance

Local Authority Charges

10:30 am

Photo of Charlie O'ConnorCharlie O'Connor (Dublin South West, Fianna Fail)
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Question 143: To ask the Minister for Finance, further to Parliamentary Question No. 194 of 18 May 2010, if he will complete his answer to the parts not addressed, namely, his views on whether a person in receipt of rental income should be entitled to have the local authority charge for non-principal private residences deducted from the net amount of rent received; if he has had any formal or informal discussions or correspondence with officials, property owners or others on the subject as a result of this new charge not being currently included on the list of allowable deductions; if he will consider including it at the next available opportunity; and if he will make a statement on the matter. [22256/10]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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Under the provisions of the Tax Acts, a person in receipt of rental income is assessed to income tax on the net amount of the rents received (i.e. the gross rents less allowable expenses incurred in earning those rents). In computing the net amount of the rents received, only those deductions that are specified in section 97(2) of the Taxes Consolidation Act 1997 are allowable. The main deductible expenses are: Any rent payable by the landlord in the case of a sub-lease; The cost to the landlord of any goods provided or services rendered to a tenant; The cost of maintenance, repairs, insurance and management of the property; Interest on borrowed money used to purchase, improve or repair the property; and Payment of local authority rates in the case of rateable properties used for commercial purposes.

As payment of the new local authority charge for residential properties is not included on the list of allowable deductions, it is not an allowable expense in computing taxable rental income. It is normal practice to have discussions with my officials on all matters relating to the tax code. This issue like all proposals for new tax or expenditure measures will fall to be considered in the context of ongoing development of budgetary and economic policy.

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