Seán Fleming (Laois, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

60. To ask the Minister for Finance if consideration has been given to providing a limited capital allowance scheme in designated areas to build residential accommodation for the rental market; if further consideration has been given to allow the VAT on construction costs to be reclaimed with a view to reducing the price for potential renters and purchasers; and if he will make a statement on the matter. [4750/19]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I can advise the Deputy that there is already a capital allowance scheme available to lessors of residential accommodation. The scheme, the Living City Initiative, was extended by Finance Act 2016 to allow capital allowances to be claimed by lessors of residential property on conversion or refurbishment expenditure incurred on property situated in a special regeneration area. The areas coming within the scheme are designated areas within the cities of Dublin, Cork, Galway, Limerick, Waterford and Kilkenny. Expenditure must be incurred in the qualifying period which at present runs from 1 January 2017 to 4 May 2020. The main features of the scheme are as follows:

- The property being converted or refurbished must have been built prior to 1915,

- The property must be located within a special regeneration area,

- Expenditure of at least €5,000 must be incurred,

- A letter of certification must be obtained from the relevant local authority, and

- After refurbishment/conversion the property must be let on bona fide commercial terms.

Further information on the scheme is available on the Revenue website www.revenue.ie.

Under the VAT Consolidation Act, VAT recovery is available on costs that are incurred in connection with a taxable supply. The sale of residential property by the person who developed it in the course of a property development business (i.e. a property developer who developed the property for sale) is always subject to VAT and a person engaged in such development activity is entitled to recover the VAT on construction costs.

In contrast, the letting of residential property is exempt from VAT. Where a person incurs VAT on construction costs of a residential property developed for letting and lets that property upon completion, the person is not entitled to recover the VAT on construction costs nor will they be liable for VAT on the rental income. Under the VAT Directive, there are no provisions that would permit VAT recovery in these circumstances, nor is there provision for VAT deductibility for persons that are not registered for VAT.

Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

61. To ask the Minister for Finance the status of the analysis of the impact of the increase in betting tax to date; when a report will issue; and if he will make a statement on the matter. [4770/19]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The increase in the betting duty rate from 1 per cent to 2 per cent, and the betting intermediary duty rate from 15% to 25%, came into effect on 1 January 2019. It is too early to draw any conclusions on the impact of these increases.

Receipts from betting duty represented less than 1 per cent of all excise receipts in 2017 and this is also likely to be the case in for 2018. In addition, unlike other excisable commodities, there is no VAT applied on betting transactions. I have outlined why I consider the betting sector needs to make a fair contribution to the Exchequer.

In any discussion on betting duty, we must acknowledge the raised public consciousness of the problem of gambling in society. While problem gambling can result in the problem gambler, and their family, bearing the severest of economic and of course personal costs, the social costs of problem gambling can extend to their employers and to public institutions in the health, welfare and justice systems, such costs ultimately borne by taxpayers. I have outlined my view that this needs to be better reflected within the betting duty regime.

During the course of the Finance Bill process I agreed to review an alternative proposal put forward by the betting sector following the announcement of increases in betting duty in Budget 2019, and I acknowledge that small independent bookmakers may have difficulty competing with larger bookmakers with retail and/or online operations. My officials are currently considering this proposal, including the compatibility of a core element with EU rules, and will set out analysis and options in relation to betting duty at the Tax Strategy Group (TSG) meeting in July. The TSG Papers will be published on the Department's website shortly afterwards.