Michael McGrath (Cork South Central, Fianna Fail)
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339. To ask the Minister for Finance further to Parliamentary Question No. 119 of 8 April 2014, his estimate of the cost of allowing the local property tax to be deducted as an expense by landlords; and if he will make a statement on the matter. [42014/14]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that the cost of allowing 100% Local Property Tax (LPT) to be deducted as an expense by landlords would be €13m in year 1 and €25m in a full year. This cost is a tentative estimate and relates to one year's LPT (i.e. does not allow for any offset of previous year's LPT).

As the Deputy is aware, the Thornhill Group, the inter-departmental group, chaired by Dr Don Thornhill, set up to consider the design of a property tax recommended that the LPT paid in respect of a rented property should be deductible for income tax or corporation tax purposes, in a similar manner to commercial rates.

The group recognised the considerable pressures on the public finances and the need to bridge the gap between expenditure and revenue, and, for this reason, suggested that consideration be given to phasing in deductibility over a period of years. The group also considered that it was for Government, having regard to the prevailing budgetary situation, to decide on the time span for phasing-in deductibility and what percentage of LPT to allow as a deduction from gross rents for tax purposes. While the issue was considered in the context of Budget 2015, I decided not to recommend its introduction to Government at this stage.