Séamus Kirk (Louth, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

65. To ask the Minister for Finance if he will consider introducing a means test in respect of the local property tax demand for families dependant on single parent family payment; and if he will make a statement on the matter. [24767/13]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

While there is no specific exemption from or reduction in the charge to Local Property Tax (LPT) for families dependant on the One Parent Family Payment, the deferral arrangements in the Finance (Local Property Tax) Act 2012, as amended, are focused on particular categories of householders and address cases where there is an inability to pay. For individuals on low incomes or those whose only income source is from the Department of Social Protection, the legislation provides for the possibility of deferring the charge to LPT in certain cases. A person who qualifies for full deferral can opt to defer 100% of the LPT liability. A person who qualifies for partial deferral can opt to defer 50% of the liability and must pay the balance of LPT.

To qualify for a deferral, the residential property must be occupied as a sole or main residence. The gross income thresholds for a full deferral are €15,000 for a single person and €25,000 for a couple, whether married persons, civil partners or qualified cohabitants. A person may claim a deferral if their gross income will not, “as can reasonably be foreseen at the liability date” exceed these thresholds in that year. To determine whether they qualify for deferral for 2013, liable persons are required to estimate on 1 May 2013 what their total gross income for 2013 is likely to be. Gross income from all sources consists of the total income before any deductions, allowances or reliefs that may be taken into account for income tax purposes and includes income that is exempt from income tax and income received from the Department of Social Protection but excludes Child Benefit. Where a deferral is being claimed on this basis, the LPT1 Return must be completed and the relevant deferral selected. The return may be submitted on-line at www.revenue.ie .

A deferral of up to 50% of the LPT liability will be possible where the gross income of the liable person does not exceed €25,000 for a single person or €35,000 for married persons/civil partners/cohabitants.

The full and partial deferral thresholds may be increased in the case of properties occupied as a sole or main residence and subject to a mortgage. In such cases, the gross income thresholds may be increased by 80% of the mortgage interest payments. The deferral option in such qualifying cases will apply until the end of 2017.

Further reliefs apply for persons who have entered into an insolvency arrangement under the Personal Insolvency Act 2012, who may apply for a deferral of the LPT that is due during the period for which the insolvency arrangement is in effect. The Act also provides that a person who suffers both an unexpected and unavoidable significant financial loss or expense, as a result of which he or she is unable to pay their LPT without causing financial hardship, may apply for full or partial deferral.

Interest of c. 4% per annum is charged on deferred amounts. This is half the interest rate charged in cases of non-compliance.

Deferrals allow tax not paid in a year to be rolled forward to be paid at a later date. Elections for deferrals are voluntary, subject to eligibility. Taxpayers who had deferred payment, but who are no longer eligible for deferrals due to improved financial circumstances, have the option of leaving the original deferrals in place in respect of previous tax liabilities, or of paying them off either in single payments or gradually.

Any amount deferred will be a relatively small part of the overall value of the property.