Terence Flanagan (Dublin North East, Renua Ireland)
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246. To ask the Minister for Finance the position regarding tax on landlords (details supplied); and if he will make a statement on the matter. [33988/15]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy's question refers to landlords in negative equity being taxed on losses, which may encompass two separate aspects of the tax system. 

If a landlord sells an investment property in negative equity at a loss then, assuming that the sales proceeds are less than the original acquisition cost of that property, no liability to capital gains tax should arise on the disposal.

With regard to rental income losses, I assume the Deputy's question concerns allowable interest deductions in computing rental income for tax purposes. Whether the rental property is in positive or negative equity would not affect the computation of rental income for tax purposes.

Where a landlord has allowable deductions equal to or in excess of gross rental income he/she would have no taxable rental income. However, it is possible that not all the outgoings of the individual will be allowable deductions.  As you are aware, an individual may be allowed a deduction of 75% of the interest paid on borrowed money used to purchase, improve or repair rented premises when calculating rental income.  I would point out that there are also a number of other allowances and deductions available to reduce the tax on rental income paid. These include, for example, the cost to the landlord of any goods provided or services rendered to a tenant and the cost of maintenance, repairs, insurance and management of the property.

In addition, wear and tear allowances are available in respect of expenditure incurred on fixtures and fittings provided by a landlord for the purposes of furnishing rented residential accommodation. These allowances are granted at the rate of 12.5% per annum of the actual cost of the fixtures and fittings over a period of 8 years.

The Office of the Revenue Commissioners has published a guide to the income tax treatment of rental income. It sets out the amount of rental income to be taken account of for income tax purposes and provides a comprehensive list of expenditure items that are allowable for deduction in computing rental income for tax purposes. This guide is available at:  .

Preparations for Budget 2016 and the consequent Finance Bill are ongoing. It would not be appropriate for me to comment at this time on what changes, if any, are being considered regarding the taxation of landlords or in relation to any other tax measure.