Barry Cowen (Offaly, Fianna Fail)
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139. To ask the Minister for Finance the estimated cost of introducing a new affordable housing tax incentive for private housing developers whereby developers could claim back 100% VAT relief on all housing or apartment units delivered within a build to rent development that are sold or rented out to eligible recipients at affordable levels (details supplied). [32384/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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VAT is governed by the EU VAT Directive (Council Directive 2006/112/EC), with which Irish VAT law must comply. Under the VAT Directive, the letting of residential property is exempt from VAT and therefore developers of such property are not entitled to VAT deductibility on their development costs where they let the property. Their rental income from these lettings is exempt from VAT. A property developer is liable for VAT on sales of developed residential property and is entitled to recover the VAT incurred in the development of that property. Under the VAT Directive there is no scope to allow VAT deductibility in relation to the development of properties that are to be put to a tax exempt use.

Barry Cowen (Offaly, Fianna Fail)
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140. To ask the Minister for Finance the estimated cost of introducing a new affordable housing tax credit whereby landlords would not have to pay tax on rental income for properties let over a five year period at affordable levels (details supplied). [32385/17]

Barry Cowen (Offaly, Fianna Fail)
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151. To ask the Minister for Finance the estimated cost of providing an income tax credit for landlords who accept HAP tenants, which would give them a tax-free allowance on 20% of rental income from a HAP tenancy. [32552/17]

Barry Cowen (Offaly, Fianna Fail)
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152. To ask the Minister for Finance the estimated cost of providing an income tax credit for landlords who accept tenants in receipt of rent supplement, which would give them a tax-free allowance on 20% of rental income from a tenancy. [32553/17]

Barry Cowen (Offaly, Fianna Fail)
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153. To ask the Minister for Finance if he has explored proposals for tax inducements to landlords if they accept HAP or rent supplement tenants by making the tax treatment of rental income from a HAP tenancy more preferential than the tax treatment of income from a tenant in the private rental market. [32554/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 140 and 151 to 153, inclusive, together.

I am advised by Revenue that there are no data available to estimate the cost of the various measures proposed by the Deputy. Under section 18 of the Taxes Consolidation Act (TCA) 1997, rental income earned by companies and individuals from a property situated in the State is taxable under Case V of Schedule D of the TCA 1997. This basis of taxation makes no distinction between rental income from property let for residential occupation and property let for commercial occupation, or between rental income from private tenants and tenants in receipt of social housing supports. Therefore, landlord income tax returns are not remitted to Revenue in a format in which rental income from tenants who are eligible for rent supplement or the Housing Assistance Payment (HAP) can be separately identified, and there is therefore no basis on which Revenue can cost the proposals as outlined by the Deputy.

The Deputy may be aware that there is already tax relief in place to support landlords in providing accommodation to tenants in receipt of the Housing Assistance Payment (HAP) or rent supplement. The relief was introduced in Finance Act 2015 in order to improve the stability of housing supply to tenants in receipt of these social housing supports. The relief allows a full 100% mortgage interest deduction against rental income (increased from 75% in 2016 and from 80% in 2017) where a landlord undertakes, for a period of at least three years, to provide accommodation to such tenants and registers such undertakings with the Residential Tenancies Board within certain time limits. Further information on this relief is available in section 97 of the Revenue Commissioners – Notes for Guidance – Taxes Consolidation Act 1997 – Finance Act 2016 Edition – Part 4 Principal Provisions Relating to the Schedule D charge, which is available at:

As the Deputy may be aware, a working group was established in early 2017 to examine and report on the tax treatment of landlords (or rental accommodation providers) and to put forward options, where appropriate, for amendments to such treatment. This working group was established as part of the ‘Strategy for the Rental Sector’ which was published by the Department of Housing, Planning, Community and Local Government in December 2016. The working group is chaired by the Department of Finance and its membership consists of officials from the Department of Finance; the Revenue Commissioners; the Department of Housing, Planning, Community and Local Government; and the Residential Tenancies Board. As part of the group’s work, it undertook a public consultation on the tax treatment of landlords and it received almost 70 written submissions from a wide range of interested parties, including individual landlords, representative bodies and charitable organisations. The report of the working group is due to be presented to me by the end of July 2017, to allow for consideration of any of the options put forward as part of my deliberations for Budget 2018.