Billy Timmins (Wicklow, Fine Gael)
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To ask the Minister for Finance the position regarding double taxation, that is, household property tax and non principal private residence tax on rental properties (details supplied); and if he will make a statement on the matter. [10759/13]

Michael Noonan (Limerick City, Fine Gael)
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The inter-Departmental Group chaired by Dr Don Thornhill on the design of a property tax (the “Thornhill Group”) recommended that the Non-Principal Private Residence charge (NPPR) should be absorbed into the Local Property Tax (LPT) as a separate (supplemental) tax, in addition to the LPT, at the existing level (currently €200) applying to non-principal private residences. The Government decided however that, while the NPPR will be collected in 2013, when a half-year LPT will also apply, it should be discontinued thereafter. Accordingly, it will not apply as a supplemental tax. There is no exemption from the LPT for those who are liable for the NPPR. As set out in the Local Government (Charges) Act 2009, as amended, liability to pay the NPPR is determined on the basis of ownership of the property in question on the "liability date" which is 31 March for 2013. The LPT does not come into effect until 1 July 2013. The Government decided to extend the NPPR into 2013 to ensure as smooth a transition as possible for local authorities, pending the introduction of the full LPT.

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. The Thornhill Group, the inter-departmental group chaired by Dr Don Thornhill, established to consider the structures and modalities of a property tax, recommended that owners, and not occupiers, be the liable persons for the Local Property Tax. This was also the view of the 2009 Commission on Taxation. Given that some rental properties have high tenant turnover, which would present significant difficulties in determining liability and collecting taxes, as well as increasing the cost of collecting the tax, the Government accepted this recommendation. Occupier liability may also give rise to perceptions of unfairness if the occupier on the valuation date (i.e. the date at which occupation of the property is deemed by law to create the tax liability) is no longer the occupier on the date at which payment of the tax becomes due.

The Local Property Tax is not an allowable deduction from rental profit for tax purposes. This is the same treatment which applied to the Household Charge and the NPPR Charge. It is, however, proposed to phase in deductibility of the Local Property Tax.