Noel Ahern (Dublin North West, Fianna Fail)
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Question 101: To ask the Minister for Finance in respect of property tax relief on investment residential properties, the annual cost to the Exchequer of same; the number of taxpayers who claim such relief; the number who claim such relief against all income, investment income or income on the specific property only; if he will provide the statistics on the type of taxpayer, level of income, and level of relief claimed on a graduated scale; if he will outline the thinking or philosophy in recent budget changes; if it was targeted at the high developer or professional who was claiming substantial relief; and if he will make a statement on the matter. [1975/11]

Noel Ahern (Dublin North West, Fianna Fail)
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Question 102: To ask the Minister for Finance if he will clarify the situation regarding the proposed property tax reliefs as announced in budget 2011, and specifically the changes affecting sale of section 23 properties, and concerns of owners who fear they will be forced to sell units, and fear no one will want to buy them due to the changes; if any assessment of likely effects on prices has been made; if this will affect quality of bank loans; if recapitalisation of banks will follow; and if he will make a statement on the matter. [1976/11]

Noel Ahern (Dublin North West, Fianna Fail)
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Question 104: To ask the Minister for Finance if he will clarify the situation in relation to changes in the budget concerning property tax reliefs and to confirm if section 50 student apartments-schemes, that is the industrial buildings allowance scheme when tax relief was purchased by investment in designated hotels, are included in the proposed changes; if he will give details of the changes that will be included; and if he will make a statement on the matter. [1978/11]

Noel Ahern (Dublin North West, Fianna Fail)
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Question 106: To ask the Minister for Finance if he will clarify the situation regarding the budget property based reliefs and noting savings to the revenue should be €60 million in 2011, and €100 million per year thereafter, if more accurate figures for each to 2020 will be given; if he will estimate the cost to the Revenue Commissioners if exemption from the new changes was made in relation to investors whose total rental income within the State would not exceed €50,000 per year; and if he will make a statement on the matter. [1983/11]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 101, 102, 104 and 106 together.

I should point out that the phased abolition of property-based tax reliefs announced in the recent Budget relates to both residential and non-residential property.

I am informed by the Revenue Commissioners that the latest relevant information available on the tax relief allowable for residential property related tax schemes is based on claims for section 23 type relief in 2008 personal income tax returns filed by non-PAYE taxpayers. These claims relate to properties for which tax relief was not previously claimed and exclude any claims made in an earlier year where these were subsequently carried forward into 2008 as unabsorbed losses. On this basis the ultimate cost to the Exchequer of the relief associated with these claims is estimated at €74.7 million and was claimed by 2,429 taxpayers.

It should be noted that any corresponding data returned by PAYE taxpayers in the income tax return (Form 12) is not captured in the Revenue computer system. However, any PAYE taxpayer with non-PAYE income greater than €3,174 is required to complete an income tax return (Form 11).

The estimated relief claimed has assumed tax forgone at the 41% rate for 2008 in the case of individuals. The figures shown correspond to the maximum Exchequer cost.

I am informed by the Revenue Commissioners that the other detailed information requested by the Deputy in regard to the numbers who claimed tax relief against different types of income and the levels of incomes and claims involved, is not readily available and could not be obtained without conducting a protracted examination of the Revenue Commissioners' records.

I am advised by Revenue that they are not yet in a position to provide data in respect of the number of claimants for 2009, as all tax returns for that year have not yet been processed.

The measures relating to property-based "legacy" tax reliefs announced in the Budget are in line with our commitment in the Joint Programme for Government to end unnecessary tax reliefs where possible. The structure of these property-based schemes has resulted in substantial ongoing legacy costs to the Exchequer.

I have sought to adopt a pragmatic and balanced approach and provide for an orderly winding down of these schemes to reduce and eliminate the remaining cost to the Exchequer over the period of the National Recovery Plan.

The measures announced in the Budget are targeted solely at passive investors and will restrict the use of and carry forward of capital allowances and limit Section 23 relief to income from the individual Section 23 property.

The changes to section 23-type reliefs, which are contained in Financial Resolution No. 20 are broadly as follows.

Firstly, for chargeable periods ending on or after 1 January 2011, section 23-type relief will be restricted to set-off against rental income only from the section 23 property itself. Up until now this set-off could be against all rental income in that year.

Secondly, unused section 23-type relief previously available for carry forward beyond the 10 year "normal life" of the relief will be lost.

Thirdly, where a person sells a section 23 property within the 10 year period at any time on or after 1 January 2011, the new owner will get no section 23 relief.

Fourthly, for unused section 23 properties that are, as yet, unsold, the relevant 10 year period for these properties would normally begin once the property is sold and let under a qualifying lease. The Budget change provided that where any of these properties have yet to commence qualifying leases as of 30 June 2011, the 10-year period will commence on that day.

The conditions relating to the sale of section 23 properties remain unchanged insofar as where a property is sold within the 10 year relevant period the seller continues to be subject to a clawback of relief already given.

I also announced in the Budget that a guillotine will be introduced to terminate all unclaimed and unused capital allowances, arising after, or carried forward from 2014 as well as unused section 23 relief carried forward from 2014.

However, in advance of this an impact assessment will be undertaken into the effects of the phased abolition of the property-based measures and the guillotine provision. This guillotine provision, which is intended to take effect at end 2014, will be provided for in future legislation. The arrangements for the impact assessment, and any consultation mechanisms involved have yet to be made.

The measures apply to all schemes involving accelerated capital allowances and tax incentive schemes relating to rented residential accommodation (section 23 type relief).

The National Recovery Plan outlines the projected savings related to these property based relief measures over the period of the Plan.

I am informed by the Revenue Commissioners that from examination of claims relating to property based incentive schemes, residential and non-residential, in personal income tax returns filed by non-PAYE taxpayers for 2008, approximately one quarter of the relief was claimed by individuals with not more than €50,000 gross rental income. If a similar proportion is assumed to apply in respect of the Budget proposal for phased abolition of property-based tax "legacy" reliefs it would result in a quarter of the expected Exchequer yield from that measure being forgone if investors with no more than €50,000 annual rental income were exempted.

Noel Ahern (Dublin North West, Fianna Fail)
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Question 103: To ask the Minister for Finance if he will clarify the situation regarding changes made in the Finance Act 2009 limiting to 75% from 100% the bank interest which could be deducted from rental income returns; if the commencement date for same can be given; the reason it applied to residential landlords only and not commercial profits operators; the way this is being checked by the Revenue Commissioners since many small investors who do their own tax returns would not be aware of the changes; if these changes have made some bank loans for investment look reckless; if such loans that might have to be written down can be quantified; and if he will make a statement on the matter. [1977/11]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The level of tax relief investors can claim on the interest for mortgages and loans on residential rental properties was reduced to 75% of the interest accrued from 7th April 2009 under Section 5 of the Finance Act 2009. Applying the reduction in relief to rents from commercial properties would have provided some additional revenue to the Exchequer. However, the mechanisms for rent levels inherent in the commercial sector could have resulted in rents increasing in certain cases if the relief was reduced. Therefore, on balance, in view of the fact that many small and medium firms are faced with difficult trading conditions at present, it was decided to maintain the status quo for the time being.

The Deputy also asked for information relating to the changes and tax returns. Taxpayers who are in receipt of rental income must submit their annual returns of income under the self-assessment system, unless the amount of rental income is small, in which case the tax is in general collected under the PAYE system. Under the self-assessment system, a return of income may be selected for audit to ensure, inter alia, that the income on the return is correctly calculated. Where self-assessment does not apply, the return of income is processed by the local Revenue office when it is received. Such returns may be subject to examination to ensure, for example, that there are no computational errors and any resultant adjustments are made where necessary.

Information on the 75% interest limit is available from a number of sources on the Revenue website, www.revenue.ie. For example, A Revenue Guide to Rental Income - IT 70, the Rental Income section under Income Tax and Part 4.8.6 of the Income Tax Capital Gains Tax and Corporation Tax Manual deal with this issue.

In relation to the Deputy's query on loans I do not have information to hand.