Róisín Shortall (Dublin North West, Social Democrats)
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218. To ask the Minister for Finance the rate of interest applied to persons who defer their local property tax; and the cost to the Exchequer in 2017, 2018 and in 2019, respectively, for every percentage point reduction in this rate. [27525/16]

Michael Noonan (Limerick City, Fine Gael)
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Part 12 of the Finance (Local Property Tax) Act 2012 (as amended) provides for a deferral of Local Property Tax (LPT) where there is an inability to pay and certain specified conditions are met. Once granted a deferral normally remains in place for the particular valuation period (2013-2019).

The annual rate of interest currently applied to deferrals is 4%. The interest is added to the primary LPT liability and the cumulative amount attaches as a charge on the property. The full liability must be paid before the property can be sold or transferred.

Almost 35,000 properties with a cumulative LPT liability of €38m have availed of the deferral option since 1 July 2013. The total interest liability generated to date in respect of these deferrals is €1.6m. It is estimated that this figure will increase to approximately €3m by the end of the valuation period assuming the number of properties availing of the deferral option remains constant.

On this basis a 1% reduction in the interest rate for the entire valuation period would cost the Exchequer €.75m, a 2% reduction would cost €1.5m and a 3% reduction would cost €2.25m. Similar percentage reductions for the years 2017 to 2019 only would cost approximately €.35m, €.7m and 1.05m respectively.