Finian McGrath (Dublin North Central, Independent)
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To ask the Minister for Finance if he will clarify issues raised in correspondence (details supplied) regarding the property tax. [56185/12]

Michael Noonan (Limerick City, Fine Gael)
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I can confirm that, if the Finance (Local Property Tax) Bill 2012 is passed by the Oireachtas, the Household Charge of €100 will cease to be payable with effect from 1 January 2013. The Government has also decided that the Non-Principal Private Residence Charge will cease to be payable with effect from 1 January 2014. Residential properties rented by landlords will be subject to Local Property Tax from 1 July 2013, with the owners of the property – in those cases, the landlord – being the liable person for payment of the tax. However any arrears of Household Charge due in respect of the period up to 31 December 2012 must be discharged. Arrears outstanding on 1 July 2013 will be increased to €200 and will be treated as Local Property Tax payable to the Revenue Commissioners. Arrears of Non Principal Private Residence charge outstanding on 1 January 2014 will also have to be discharged.

With regard to PRSI on rental income, the position is as I stated in my Budget day speech on 6 December 2012. The Minister for Social Protection, Deputy Burton, is bringing forward legislation to change PRSI contributions as follows:

-Where modified PRSI rate payers have income from a trade or profession, such income and any unearned income they have will be made subject to PRSI with effect from 1 January 2013.

-Unearned income for all employees will become subject to PRSI in 2014. This means that PRSI will be payable on all income generated from wealth such as rental income, investment income, dividends and interest on deposit and savings.

Prior to Budget 2013, modified contributors paid PRSI on earnings derived from their employment but did not pay PRSI on any other stream of income e.g. from a trade or profession, or on unearned income (dividends etc.)

As a result of Budget 2013, modified contributors who have income from a trade or profession will now be subject to PRSI (at a rate of 4%) on the profits from the trade or profession and also on any unearned income that they may have, which would include rental income. PRSI will apply at a rate of 4% on the profits from the rental income.

Modified contributors are generally permanent and pensionable civil and public servants recruited before 6 April 1995; for example, registered doctors and dentists employed in the civil service recruited prior to 6 April 1995.

The report of the Expert Group on the Design of a Local Property Tax, chaired by Dr Don Thornhill, recommended that Local Property Tax paid in respect of a rented property should be deductible for tax purposes, in the same way as commercial rates are deductible for tax purposes. It is the intention of the Government to introduce such a provision on a phased basis. However, it is not provided for in the Finance (Local Property Tax) Bill as initiated.

Kevin Humphreys (Dublin South East, Labour)
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To ask the Minister for Finance the income limits of €15,000 for a single person and €25,000 for a couple enable deferrals of the local property tax for tenants of social housing units; if tenants of social housing units will have to register for the local property tax or will the responsibility be borne by local authorities and approved housing bodies; and if he will make a statement on the matter. [56003/12]

Michael Noonan (Limerick City, Fine Gael)
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The Finance (Local Property Tax) Bill 2012, as published, provides for exemptions from and deferral of payment of Local Property Tax in certain circumstances. In the case of properties which are owned by a local authority or a social housing body, the local authority or the social housing body, as the case may be, will be the liable person and will be responsible for registration for and payment of the Local Property Tax. Tenants will not be liable persons and therefore will not have to register for the tax.

Deferrals can only be claimed where the liable person’s income is below the relevant threshold. A local authority or social housing body will not qualify for a deferral.

However, a property may qualify for an exemption from the Local Property Tax if it is owned by a charity or a body established by statute and the property is used solely or primarily to provide special needs accommodation, meaning accommodation provided to persons who by reason of old age, physical or mental disability or other cause require special accommodation and support to enable them to live in the community.

Kevin Humphreys (Dublin South East, Labour)
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To ask the Minister for Finance if there will be amendments to the Finance Local Property Tax Bill 2012 at Committee Stage; if he will outline the way the local property tax will be applied to social housing units managed by local authorities and approved housing bodies, and collected from tenants; and if he will make a statement on the matter. [56004/12]

Michael Noonan (Limerick City, Fine Gael)
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It is not proposed at this point to make amendments to the Finance (Local Property Tax) Bill on Committee Stage but I will give consideration to any constructive suggestions put forward during the debate in the House. As already advised to the Deputy, subject to the enactment of the Bill, in the case of properties which are owned by a social housing body, that body will be the liable person and will be responsible for registration for and payment of the Local Property Tax

Exemption from the Local Property Tax will apply where the property is owned by a charity or a body established by statute, including a local authority, and the property is used solely or primarily to provide special needs accommodation.

Local authority residential properties will be subject to the Local Property Tax, for which the local authority will be liable. The implications for tenants of the application of the tax will be a matter for the relevant local authorities.

Kevin Humphreys (Dublin South East, Labour)
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To ask the Minister for Finance the valuation mechanism for determining the value of the local property tax on social housing units whether in the control of a local authority or an approved housing body; if there will be a flat valuation applied across the sector or if it will be determined on the size of the unit; and if he will make a statement on the matter. [56005/12]

Michael Noonan (Limerick City, Fine Gael)
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Subject to enactment of the Finance (Local Property Tax) Bill 2012, the valuation mechanism for determining the value of social housing units that are relevant residential properties whether in the control of a local authority or an approved housing body will be as for any other relevant residential property within the charge to the tax and will based on chargeable value as set out in the Bill – the price which the unencumbered fee simple of the property might reasonably be expected to fetch on a sale in the open market were the property to be sold on the valuation date in such manner and subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for property and with the benefit of any easement necessary to afford the same access to the property as would have existed prior to that sale. The nature of the residential property will be reflected in the chargeable value. Where the owner of a residential property is a charity or a body established by statute and the property is used solely or primarily to provide special needs accommodation – that is accommodation provided to persons who by reason of old age, physical or mental disability or other cause require special accommodation and support to enable them to live in the community – that residential property will be exempt from the charge to the Local Property Tax.

Kevin Humphreys (Dublin South East, Labour)
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To ask the Minister for Finance the way the special needs accommodation provision of Section 7.3 of the Finance (Local Property tax) Bill 2012 will be defined; if it will it use specific guidelines from the Department of Environment, Community and Local Government; if that exemption will apply to all elderly people who are currently tenants in social housing units; if it will also apply to accommodation provided to the homeless and travelling community; and if he will make a statement on the matter. [56006/12]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners, who will be responsible for the administration of the Local Property Tax, that, subject to enactment of the Finance (Local Property Tax) Bill 2012, guidelines will be published to enable liable persons to complete the property tax return and in particular to determine whether their property is an exempt property, including whether it qualifies for an exemption on the grounds that the property is used solely or primarily to provide special needs accommodation. The exemption for special needs accommodation is not a blanket exemption for all housing supplied to elderly persons, the homeless and the travelling community. It is only for the type of accommodation provided to persons who, by reason of old age, physical or mental disability or other cause, require special accommodation and support to enable them to live in the community.