Patrick Nulty (Dublin West, Labour)
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Question 111: To ask the Minister for Finance if the criteria for being defined as a first-time buyer for stamp duty purposes are identical to the criteria applied to those seeking mortgage interest relief; and if he will make a statement on the matter. [4832/12]

Michael Noonan (Limerick City, Fine Gael)
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The position is that the stamp duty exemption for "first time buyers" has been abolished in relation to instruments executed on or after 8 December 2011. As regards instruments executed on or before 7 December 2011, a "first-time buyer" for stamp duty purposes is a person (or where there is more than one buyer, each person) who has not on any previous occasion, either individually or jointly, purchased or built on his or her own behalf, or in a fiduciary capacity, a house in Ireland or abroad. A person is also regarded as a purchaser where a gift of a house is taken on or after 22 June 2000 or a gift of part of a house is taken on or after 27 June 2000.

As regards the tax relief in respect of interest paid on qualifying home loans (known as mortgage interest), the description "first time buyer" is used to describe an individual who is entitled to tax relief on greater amounts of interest paid and at higher rates of relief for the first 7 tax years in respect of which that individual is entitled to claim tax relief on interest paid on qualifying home loans.

As the Deputy is aware, I am introducing increased relief for those purchasers of houses for the first time in the 2004 to 2008 period and details will be in the forthcoming Finance Bill.

Patrick Nulty (Dublin West, Labour)
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Question 112: To ask the Minister for Finance the tax breaks and allowances that exist here for the purchase of and maintenance of commercial property; the cost of these to the Exchequer on annual basis for the years 2008, 2009, 2010 and 2011; and if he will make a statement on the matter. [4836/12]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by the Revenue Commissioners that where a commercial premises is in use for the conduct of a trade or profession, or where the premises is being let for such a business, then any normal, recurring, non-capital expenses which are incurred in the purchase, maintenance, upkeep, decoration and repair will generally be treated as deductible expenses for tax purposes. The expenses qualifying include interest payable on a loan to purchase, extend, repair or maintain a commercial building. The tax code also provides a general scheme of capital allowances in respect of expenditure on the construction of certain industrial buildings. The type of buildings that qualify under the general scheme of capital allowances for industrial buildings include factories and mills, harbours, airport runways and aprons, farm buildings and hotels and other tourist infrastructure. In general, buildings such as offices or retail premises are regarded as commercial and no capital allowances are available in respect of the cost of their construction. The "normal" rate at which capital allowances apply to industrial buildings under the general scheme is currently 4% per annum over 25 years.

In addition, under the various property and area-based incentive schemes, which have operated for many years, capital allowances were available in respect of the construction or refurbishment of certain commercial and industrial buildings. These schemes have all now been terminated except for the Specialist Palliative Care Units Scheme (which was never commenced) and the Mid-Shannon Corridor Tourism Infrastructure Investment Scheme (expiry 31/5/2015).

These incentive reliefs allow expenditure on industrial and commercial buildings to be written off for tax purposes at a faster rate than might otherwise be the case. In addition, the schemes provided relief for buildings, which would not otherwise get relief in the first place.

Following an Economic Impact Assessment carried out by my Department during 2011, certain restrictions are being introduced as to how allowances, which were available under the various property and area-based incentive schemes, can be used after the end of 2014. These measures, which I announced in the Budget last December, only apply to passive investors and the details will be included in the forthcoming Finance Bill. Under the proposed measures investors in accelerated capital allowance schemes (that is, schemes where allowances of greater than 4% per annum apply) will no longer be able to use unused capital allowances beyond the tax life of the particular building where that tax life ends on or after 1 January 2015. Where the tax life of a building has ended before January 2015, no carry forward of unused allowances into the tax year 2015 or any later tax year will be allowed.

The Revenue Commissioners have provided the following table which sets out the various property incentive schemes referred to above and the final termination date for incurring qualifying construction or refurbishment expenditure under each scheme.

Notes to Table

1) The termination dates shown in the Table are the dates by which the construction/refurbishment work on a building has to be carried out if the expenditure that is attributable to that work is to qualify for tax relief, not the date by which a building must be completed/sold or relief claimed. The termination dates shown are the final termination dates. Earlier termination dates may have applied in certain circumstances.

2) Capital allowances for expenditure incurred on hotel projects are of long standing and different rates have applied over time. An accelerated rate of 15% per annum (10% in year 7) applied in relation to construction/refurbishment expenditure incurred from 28/1/1994 up to 31/07/2008, subject to certain transitional arrangements being met. For expenditure incurred after that date, or where the transitional arrangements were not met, the annual allowance is 4%.

3) Annual allowances of 4% are available. Capital allowances in respect of industrial buildings may, subject to the conditions and limitations set out in the legislation, be used against trading and professional income as well as rental income received from the letting of such a building. The estimated costs in respect of capital allowances for industrial buildings for 2008 and 2009, the latest years for which figures are available, are €808.1m and €800.0m respectively. It is not possible to separately identify the cost of allowances claimed in respect of rental income derived from commercial property only.

The estimated cost of the property incentives element of the capital allowances costs shown above is as set out in the table below. The figures shown relate to the cost to the Exchequer of tax relief in respect of the industrial buildings allowance element of a range of property-based incentives derived from personal income tax returns filed by non-PAYE taxpayers and corporation tax returns filed by companies for 2008 and 2009, the latest years for which this information is available:

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 and 2009 in the case of individuals and 12.5% in the case of companies for both years. The figures shown correspond to the maximum Exchequer cost in terms of income tax and corporation tax. Corresponding data cannot yet be provided for 2010 and 2011, as the tax returns for these years are either not yet due or are still being processed.

Tax relief is also available under Section 482 of the Taxes Consolidation Act 1997 for expenditure incurred on the restoration and maintenance of significant buildings and gardens. While a small number of these properties are operated on a commercial basis, it is not possible to split out the cost of the relief for such properties without a protracted examination of the records. In addition, Section 766A of the Taxes Consolidation Act 1997 provides for a 25% tax credit in respect of expenditure on buildings or structures used for research and development.

Patrick Nulty (Dublin West, Labour)
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Question 113: To ask the Minister for Finance the amount of extra revenue that will be garnered by increasing both capital gains tax and capital acquisitions tax to 40% in 2012; and if he will make a statement on the matter. [4837/12]

Michael Noonan (Limerick City, Fine Gael)
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Budget 2012 saw an increase in the rate of both Capital Acquisitions Tax (CAT) and Capital Gains Tax (CGT) from 25% to 30%. I am advised by the Revenue Commissioners that the estimated full year yield to the Exchequer from increasing the CAT tax rate by 10% to 40% could be in the region of €110 million.

I am also advised by the Revenue Commissioners that the estimated full year yield to the Exchequer from increasing the CGT tax rate by 10% to 40% could be in the region of €166 million. This figure includes corporate gains. However, these estimates assume no behavioural changes on the part of taxpayers, and large increases in rates such as are contemplated in the question may have a significant behavioural impact and may not produce a corresponding increase or decrease in tax yield. In current economic conditions any estimate of additional yield must be treated with caution. In addition, increasing the rate could, in theory, lead to a reduction in yield from the tax.