Michael McGrath (Cork South Central, Fianna Fail)
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77. To ask the Minister for Finance the cost to the Exchequer per annum of the remaining property related tax reliefs; when these reliefs will expire; and the amount of money that would be saved for the Exchequer if they were ended immediately, or on a more phased basis, over a number of years. [6529/15]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by the Revenue Commissioners that the available information on the cost to the Exchequer of property-related tax schemes for the tax year 2013, the latest year for which this information is available, is provisionally estimated at €177 million.

This information is based on tax returns of self-assessed individuals and companies. It should be noted that the corresponding data returned by PAYE taxpayers is not captured in Revenue systems for 2013 in a manner that can be analysed in respect of this Question. However, any PAYE taxpayer with non-PAYE income greater than €3,174 is required to complete a self-assessment tax return.

The estimated relief claimed has assumed tax forgone at the 41% rate for 2013 in the case of individuals and 12.5% in the case of companies. The figures shown correspond to the maximum Exchequer cost in terms of Income Tax and Corporation Tax.

Corresponding data cannot yet be provided for 2014 as the tax returns for this year are not yet due.

There are no property schemes or area based property incentives that could be considered active at the present time. All have expired and no new expenditure can qualify for any relief. However, there remains a potential Exchequer cost from these schemes as capital allowances and other reliefs, which had previously been given, continue to be claimed or carried forward to be claimed in future years. These are the basis for the costing given above.

There are also a number of statutory provisions, introduced in recent years, which can potentially affect the rate at which these allowances can be used and, in some cases, terminate the carry-forward of allowances altogether. These are:

- The High Earners Restriction, which was introduced to ensure that, in the case of certain individuals, a minimum effective rate of income tax of 30% is paid annually. This is achieved by restricting the rate at which certain reliefs, including property incentives, can be used to shield income. While the reliefs themselves are not lost, their use is spread out potentially over a much longer time period.

- An upper limit on the annual use of excess capital allowances to shield other income of taxpayers. This provision applies primarily to passive investors in such projects.

- An additional charge to Universal Social Charge (USC) for certain higher income individuals on their use of these property reliefs.

- From 2015, it will not be possible for passive investors to carry-forward unused capital allowances beyond a building s tax life. Where the tax life has already ended, unused allowances have been lost since 1 January 2015.  

These measures, in particular the one which came into effect on 1 January last, will address the legacy issues relating to the Exchequer cost of these expired property incentive schemes. I am further informed that currently there are 3 property related tax reliefs on the statute books which have not been formally commenced. These are:

- Relief for Qualifying Specialist Palliative Care Units (enacted in 2008),

- The Living City Initiative (enacted in 2013), and

- Relief for Certain Aviation Services Facilities (enacted in 2013).

I have already stated my intention to commence the Living City Initiative and the relief for aviation services facilities as early as possible during this current year. Both of these reliefs are targeted and will only apply to expenditure incurred during a 5 year period from the date of commencement. However, there is no current Exchequer cost arising from these schemes.

For the purposes of this response it is assumed that tax reliefs related to principal private residences, including mortgage interest relief, do not come within the scope of the Deputy s request.