Clare Daly (Dublin Fingal, Independent)
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301. To ask the Minister for Finance his plans to address the fact that those who cannot afford to pay the local property tax have interest levies imposed to claim a deferral, essentially placing an extra tax on economic hardship. [25666/16]

Michael Noonan (Limerick City, Fine Gael)
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The 2012 report of the interdepartmental group (chaired by Dr Don Thornhill) on the design of a property tax (LPT) considered the issue of introducing an exemption or waiver for property owners below a certain income threshold.

Having considered the possible inequities and administrative challenges of such an exemption or waiver structure it was decided to instead introduce a deferral scheme that could assist property owners in a number of different scenarios. The four categories to which a deferral (or partial deferral) could apply were agreed as, Income Threshold, Personal Representative of a Deceased Person, Personal Insolvency and Hardship Grounds. In excess of 30,000 property owners availed of the various deferral options in 2016.

There are a number of criteria that must be met to qualify for a deferral but in the main the income of the individual must be below €15,000 for a full deferral and below €25,000 for a partial deferral (€25,000 and €35,000 thresholds apply for couples). These thresholds, which can be increased by 80% of gross mortgage interest payments, were recommended by the interdepartmental group report based on analysis by the ESRI.

Part 12 of the LPT Act clearly sets out the meaning a deferral of LPT and the qualifying criteria that must apply. The law also clearly sets out that deferral is not an exemption and that the tax becomes payable at a later date. Part 12 (Section 137) also clearly states that the deferred amount remains as a charge on the property until paid and generates an interest calculation (Section 131) of 4% per annum. I should point out that the 4% interest rate is half of the standard rate of 8% that applies to the late payment of LPT.

Following his 2015 review of LPT, Dr Thornhill recommended that the deferral options should continue to apply and that the relevant income thresholds be revised periodically in line with changes in the Consumer Price Index (CPI).  Dr Thornhill also recommended that for owner-occupiers aged 80 years or over and also for those with stated certified long term illnesses and disabilities who are living alone, that consideration be given to raising the eligible income limit for deferrals to €20,000. My Department will be considering issues relating to the implementation of this and other recommendations made by Dr Thornhill in due course.

Finally, where a liable person does not qualify for or does not wish to avail of a deferral there are a wide number of phased payment options available to assist with budgeting. The various options are designed to provide the maximum possible flexibility for individual circumstances.