Brendan Griffin (Kerry South, Fine Gael)
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Question 22: To ask the Minister for Finance his plans to introduce a scheme to help persons who are in apartments or houses which are not suitable for their family size and find themselves in negative equity and unable to sell the apartment or house in the current climate; if he will consider a wavier scheme for persons who rent their properties in order that, in turn, they can rent properties that suit their family requirements and because of this will not be eligible for mortgage interest relief and will be liable to pay tax to the Revenue Commissioners because they leased their own property. [38389/11]

Michael Noonan (Limerick City, Fine Gael)
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As regards the possible introduction of new mortgage products for the situation described by the Deputy, the Central Bank has advised me that they wrote to all mortgage lenders to ascertain whether they were offering, or intended to offer, a mortgage product that would allow home owners to sell their existing home and transfer the negative equity portion of the original loan to the new loan. In response to the Central Bank's letter, only a small number of mortgage lenders said that they would consider offering such a facility. A trial period commenced in mid-2011 and was due to be assessed by the Central Bank and the institutions involved before the end of the year. However the low level of activity makes it difficult to conduct a meaningful review at this time and the proposed review will not take place until the first half of 2012. Any institution offering such a facility may only do so in accordance with criteria agreed in advance with the Central Bank. As regards income tax relief against the profits from letting residential investment properties the Deputy might wish to note that in certain circumstances, partial tax relief is available against such profits. This partial tax relief is in respect of interest on money borrowed to purchase, improve or replace the property concerned. The level at which interest repayments can be claimed against tax for a residential rental property is currently 75%. The deduction for such interest is subject to compliance with the requirements of the Private Residential Tenancies Board. For tax relief purposes residential investment property is generally understood to be property from which the owner seeks to derive profits through lettings.

Maureen O'Sullivan (Dublin Central, Independent)
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Question 23: To ask the Minister for Finance if he will exempt all goods, excluding alcohol and cigarettes, retailing at less than €10 from any VAT increase in budget 2012; and if he will make a statement on the matter. [38421/11]

Michael Noonan (Limerick City, Fine Gael)
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VAT is charged on the supply of goods and services, and the rate applying is subject to the requirements of EU VAT law with which Irish VAT law must comply. The EU VAT Directive provides that Member States must apply VAT to all economic activity, which includes the supply of goods. Member States must apply a standard VAT rate to the majority of goods and services, with the option of applying reduced rates of up to 15% in defined circumstances. In this respect, the VAT Directive does not allow for two separate standard VAT rates to apply, at 21% and 23% in this case if goods below €10 were to continue to be charged at the current standard rate. In addition, because of VAT competition rules, it is generally not possible to treat the supply of goods and services differently, based on their value.

Maureen O'Sullivan (Dublin Central, Independent)
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Question 24: To ask the Minister for Finance if he will exempt from any budget VAT increase on certain repairs for example shoe repairs, bicycle repairs and alterations to personal clothing, when the charge to the consumer is less than €25; and if he will make a statement on the matter. [38422/11]

Michael Noonan (Limerick City, Fine Gael)
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The 2% VAT increase I announced recently relates to an increase in the standard VAT rate from 21% to 23%. The standard VAT rate applies to the majority of goods and services in the State including cars, petrol and auto-diesel, electrical equipment and CD/DVDs, alcohol, cigarettes and tobacco, telecommunications, furniture, cosmetics, adult clothing and footwear. However, I would point out that there will be no increase in VAT on all remaining goods and services that are currently liable to the 9% and 13.5% reduced rates, the zero rate, or those items that are exempt from VAT. In effect, this means that there will be no VAT increase on most food, children's clothes and footwear, oral medicines, tourism and restaurant services, housing, construction, domestic fuels, labour intensive services and general repairs and maintenance.

In this context, there will be no increase in the VAT on shoe repairs, bicycle repairs and alterations to personal clothing, as these services are subject to the 13.5% VAT rate which is not being changed in the Budget.