Eoghan Murphy (Dublin South East, Fine Gael)
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219. To ask the Minister for Finance his plans to address the issue whereby those homeowners whose property is in negative equity find it difficult to rent elsewhere (details supplied). [39730/13]

Michael Noonan (Limerick City, Fine Gael)
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The position is that mortgage interest relief is available in respect of interest paid on qualifying loans taken out on or after 1 January 2004 and on or before 31 December 2012 and such relief applies up to and including the tax year 2017. As you may be aware, mortgage interest relief is available, at varying rates and subject to certain ceilings, in respect of interest paid by an individual on a loan used by that individual for the purchase, repair, development or improvement of his/her sole or main residence.

Finance Act 2009 introduced a cap of 75% on the amount of interest on loans used to purchase, improve or repair rented residential property, that can be deducted in computing rental profit for tax purposes. The restriction applies to interest accruing on or after 7 April 2009. It does not apply to loans in respect of rented commercial property.

I am advised by the Revenue Commissioners that rental profit for tax purposes is the gross rental income less allowable expenses incurred in earning that rent. In computing the amount of rental profit, only those deductions that are specified in section 97(2) of the Taxes Consolidation Act 1997 are allowable as deductions against the gross rental income. The main deductible expenses are any rent payable by the landlord in the case of a sub-lease; the cost to the landlord of any goods provided or services rendered to a tenant; the cost of maintenance, repairs, insurance and management of the property; the interest paid on borrowed money used to purchase, improve or repair the property (which, in the case of residential property, is restricted to 75% of the interest and is subject to compliance with PRTB registration requirements for all tenancies that existed in relation to the property in the relevant year); and payment of local authority rates.

In addition, wear and tear capital allowances are available in respect of the capital expenditure incurred on fixtures and fittings provided by a landlord for the purposes of furnishing rented residential accommodation. These allowances are granted at the rate of 12.5% per annum of the actual cost of the fixtures and fittings over a period of 8 years.

The NPPR charge would be a matter for the Minister for the Environment, Community and Local Government.

It is the standard practice for the Minister for Finance to review all tax expenditures and reliefs in the run up to annual Budget. It is also a long-standing practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.