Dan Neville (Limerick, Fine Gael)
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43. To ask the Minister for Finance the position regarding the local property tax in respect of a person (details supplied) in County Limerick. [16888/14]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by Revenue that a member of the Local Property Tax (LPT) team has made direct contact with the person in question on foot of the Deputy's question.  The person provided all of the required information with regard to her financial circumstances and the LPT official confirmed to her that she qualified for a full deferral of her 2014 LPT liability based on her income. The LPT official assisted the person in filing her 2014 notification via the online system and her LPT record has been updated to reflect her deferral status.

Róisín Shortall (Dublin North West, Independent)
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44. To ask the Minister for Finance the reason for the 4% interest placed on deferred local property tax charges; if he considered means-testing the addition of this interest; and if he will make a statement on the matter. [16913/14]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will be aware that the Local Property Tax (LPT) regime includes arrangements whereby a person may opt to defer, or partially defer, payment of the tax if certain conditions are met. Part 12 of the Finance (Local Property Tax) Act 2012 (as amended) provides for four separate categories of deferral of LPT; Income Threshold, Personal Representative of a Deceased Person, Personal Insolvency and Hardship Grounds.

As the Deputy points out, any deferred LPT carries an interest charge of 4% per annum.  This is half the rate charged on overdue income tax, capital gains tax and LPT, which is currently set at 8% per annum.  In considering how to provide for a deferral regime for those who were unable to make their LPT payments, I was mindful of the recommendations contained in the report of the Thornhill Group.  In their report, the Thornhill Group recommended that where taxpayers are entitled to, and have elected for, deferral of LPT, interest due on deferred payments should be at a lower rate to the rate charged on overdue LPT.  

On the question of means testing to determine whether deferred interest should apply, the Deputy will be aware that the annual interest amount, for example, on a Band 2 property is €9.  In circumstances where the main deferral options are already based on a self assessed "income" test and property owners can determine themselves when they are in a position to pay the deferred liability, including when a property is being sold or disposed of, I do not consider further means testing is necessary.  The imposition of interest is, as I have outlined earlier, an appropriate additional charge for the deferred payment of the tax in question.  

In providing for the possibility of deferral of the tax, the reduced rate of interest seeks to recognise that the circumstances in which a person defers the tax charge are completely different from those where the property owner simply fails to pay the tax.  I believe the 4% rate of interest achieves that balance and is a fair and reasonable approach.