Éamon Ó Cuív (Galway West, Fianna Fail)
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103. To ask the Minister for Finance the position in relation to changes made in the recent Finance Bill regarding the dwelling house exemption; the effective date for a second home gifted by parents to non-dependent children in circumstances (details supplied); and if he will make a statement on the matter. [12671/17]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by Revenue that Section 86 of the Capital Acquisitions Consolidation Act 2003 provides for an exemption from capital acquisitions tax in relation to gifts and inheritances of dwelling houses in certain circumstances. This exemption is referred to as the "dwelling house exemption". In Section 52 of Finance Act 2016, I made changes to this exemption with respect to gifts or inheritances taken on or after 25 December 2016. The changes have two principal effects.

Firstly, the dwelling house exemption is generally only available for inheritances. With one exception, it is no longer possible to receive a tax-free gift of a dwelling house. The exception is where a person gifts a dwelling house to a dependent relative. For this purpose, a dependent relative is a direct relative of the donor, or of the donor's spouse or civil partner, who is permanently and totally incapacitated because of physical or mental infirmity from maintaining himself or herself or who is over the age of 65.

Secondly, the inherited dwelling house must have been the deceased person's principal private residence at the date of his or her death. This requirement is relaxed in situations where the deceased person had ceased to occupy the house before the date of death because of ill health; for example, to live in a nursing home.

The recent changes made to the dwelling house exemption have no retrospective implications for gifts or inheritances of houses received before 25 December 2016. The conditions that have to be met to qualify for an exemption and to avoid any subsequent withdrawal of the exemption are those that are in force at the date of the gift or the inheritance. With regard to the specific circumstances provided by the Deputy, if the qualifying conditions were met on the gift of the house three years ago, a withdrawal of the exemption will not arise if that individual continues to occupy the house for the six year period following the gift.