Written answers
Tuesday, 14 July 2015
Department of Finance
Tax Code
John Browne (Wexford, Fianna Fail)
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298. To ask the Minister for Finance the reason there is an imbalance in the tax treatment between private rental income and commercial rental income, regarding the different treatment of mortgage interest relief; his plans to provide for equity of treatment under section 97(2) of the Taxes Consolidation Act 1997; his views on the inherent inequality in refusing to provide equity of treatment on the basis of a figure of €80 million to restore mortgage interest deductibility to 100%, in the case of private rental income; and if he will make a statement on the matter. [28846/15]
Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, a restriction of 75% on the deductibility of interest in computing taxable rental income from residential property was introduced in the April 2009 supplementary budget in respect of all residential lettings as part of an urgent revenue-raising package aimed at stabilising the public finances.
At the time of its introduction, a similar restriction in respect of rental income from commercial property was also considered. However, it was felt that such a restriction in the commercial sector could have resulted in rents increasing and consideration was given to the fact that many small and medium firms were already facing difficult trading conditions.
As the Deputy will know, all tax reliefs and incentives are subject to regular review as part of the annual Budget and Finance Bill process. Any decisions taken by the Government in this regard are usually announced on Budget Day.
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