James Bannon (Longford-Westmeath, Fine Gael)
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Question 51: To ask the Minister for Finance the reason a person (details supplied) in County Longford and their spouse with students at third level cannot receive tax relief on rents paid for these students, none of whom have grants, while any other couple paying rent can claim up to €4,000; and if he will make a statement on the matter. [5494/11]

Michael Noonan (Limerick City, Fine Gael)
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Section 473 of the Taxes Consolidation Act 1997 provides tax relief for rent paid, up to certain limits, for private accommodation used as a sole or main residence. A phased withdrawal of this relief was announced in the recent National Recovery Plan 2010 – 2014, Budget and Finance Act. The amount of rent that can be relieved will reduce on a gradual basis, culminating in the total withdrawal of the relief for the year 2018 and subsequent years. The relief takes the form of a reduction in income tax liability. The reduction is an amount equal to the lowest of:

the total amount of rent paid multiplied by the standard rate of tax for that year;

the specified limit (which in the case of a person assessed to tax as a married couple is €3,200 or, if the person is aged 55 years or over, €6,400 for the tax year 2011) multiplied by the standard rate of tax for that year; and

the amount that reduces the income tax of that person to nil.

The relief is not available to any person who was not paying rent on 7 December 2010.

Rent paid by parents for accommodation for their children undergoing third level education does not qualify for the relief as the rented accommodation is not the sole or main residence of the parents.

Notwithstanding the above, the Government acknowledges the continuing financial pressures on parents and students and is therefore making significant commitments in the area of third level education. In general, there are no tuition fees payable at undergraduate level. This is an effective subsidy to students and their parents or guardians who would otherwise have to pay some or all of the economic cost of providing such undergraduate education.