John Browne (Wexford, Fianna Fail)
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119. To ask the Minister for Finance that allowing local property tax as a deductible expense against the income of a business which lets private residential property would reduce the yield from the tax and the way that equates with fairness in the tax system, notwithstanding his acceptance of the Thornhill Group’s recommendation that it should be deductible at a future date; and if he will make a statement on the matter. [16328/14]

Michael Noonan (Limerick City, Fine Gael)
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Local Property Tax (LPT) is a tax arising from ownership of a property that is payable regardless of whether the property is let or not. In general, the owner of the property is the liable person.

The introduction of deductibility of LPT for rental properties would have negative revenue implications in net terms for the Exchequer.

While the Deputy points to the perceived unfairness the non-deductibility of the tax for those in business letting private residential property, the system nevertheless aims to treat taxpayers who are in similar positions in a similar way. Accordingly, all landlords in similar circumstances are treated in the same manner.

As indicated in replies to previous Parliamentary Questions, I have accepted in principle the recommendation in the Thornhill report that LPT should be a deductible expense in calculating a landlord s taxable rental income and that this deduction be phased in over a number of years with the start date being determined by the economic and budgetary situation. The manner and timing of this change has not yet been considered, and will require a change to section 97 of the Taxes Consolidation Act 1997.