Written answers
Thursday, 9 May 2013
Department of Finance
Tax Credits
Pearse Doherty (Donegal South West, Sinn Fein)
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69. To ask the Minister for Finance the current tax credit for rent relief; if it is being phased out and if so by when; and the cost of the tax relief in a full year at its current amount and at its previous value for €400 per annum. [22001/13]
Michael Noonan (Limerick City, Fine Gael)
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Section 473 of the Taxes Consolidation Act 1997 provides an allowance at the standard rate for a person who proves for a year of assessment that they have paid rent in respect of a certain type of private tenancy which is their main residence. The relief takes the form of a reduction in income tax chargeable on an individual’s income by an amount equal to the lowest of the total of such payments multiplied by the standard rate of tax for that year;
- the “specified limit” (see below) multiplied by the standard rate of tax for that year;
- the amount that reduces the income tax of that person to nil.
The relief is being withdrawn on a phased basis with effect from 8 December 2010 and ending in 2017. No relief is due to individuals who commence renting on or after that date. The table below sets out the “specified limits” for the years 2010 to 2018.
| Tax Year | Single Under 55 | Single Over 55 | Widowed/ Married under 55 | Widowed/ Married over 55 |
|---|---|---|---|---|
| 2010 | 2,000 | 4,000 | 4,000 | 8,000 |
| 2011 | 1,600 | 3,200 | 3,200 | 6,400 |
| 2012 | 1,200 | 2,400 | 2,400 | 4,800 |
| 2013 | 1,000 | 2,000 | 2,000 | 4,000 |
| 2014 | 800 | 1,600 | 1,600 | 3,200 |
| 2015 | 600 | 1,200 | 1,200 | 2,400 |
| 2016 | 400 | 800 | 800 | 1,600 |
| 2017 | 200 | 400 | 400 | 800 |
| 2018 | 0 | 0 | 0 | 0 |
The most recent year for which detailed information is available regarding the rent relief scheme is the income tax year 2010, which presumably is the year to which the Deputy refers when he refers to “its previous value for €400 per annum”. The latter is the reduction in income tax chargeable which would apply in the case of a single person under 55 based on the “specified limit” of €2,000 multiplied by the standard rate of tax. In 2010, the cost to the Exchequer of the rent relief scheme is estimated at approximately €83 million. On this basis, assuming the cost base has remained constant in the years since 2010, the full year cost to the Exchequer in 2013 terms would be reduced by about 50% to a cost of the order of €40 million.
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