Paul McAuliffe (Dublin North West, Fianna Fail)
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269. To ask the Minister for Finance when the Revenue Commissioners will have the valuation process finalised in relation to local property tax reforms; and if he will make a statement on the matter. [37529/21]

Paul McAuliffe (Dublin North West, Fianna Fail)
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270. To ask the Minister for Finance when the Revenue Commissioners will be able to quantify the monetary value of new builds by local authority in relation to local property tax reforms; and if he will make a statement on the matter. [37530/21]

Catherine Murphy (Kildare North, Social Democrats)
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285. To ask the Minister for Finance the date and the way in which changes to the local property tax system will be introduced. [38014/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 269, 270 and 285 together.

I would advise the Deputies that the revaluation of residential properties, for Local Property Tax (LPT) purposes, on 1 November 2021, and the bringing of newly completed properties within the charge to LPT, will depend on the Finance (Local Property Tax)(Amendment) Bill 2021 being enacted before the Dáil and Seanad adjourns for the summer recess.

I am advised by Revenue that the revaluation process will involve liable persons being required to self-assess the value of their residential properties as at 1 November 2021 and submit this value to Revenue by 7 November 2021, in the case of a paper return, and by 19 November 2021, in the case of an online return.

This self-assessment of values on 1 November 2021 will apply to properties that have been chargeable to LPT since 2013 and to properties that have been completed since 2013 but have remained outside the LPT charge in the intervening period.  In addition, for the valuation period starting with the year 2022, newly completed properties will be brought within the charge to LPT on an ongoing basis from 1 November following their completion.

In good time prior to the valuation date on 1 November 2021, Revenue will issue LPT return forms to liable persons to be used for the submission of their self-assessed property values. With the return form, Revenue will also issue a document called a ‘Notice of Estimate’ containing an amount of LPT. This is not an assessment of the valuation of that person’s property. Instead, it is an amount of local property tax that will become payable should a liable person not submit a self-assessed value to Revenue. While the amount may coincide with the value a liable person would self-assess, the person is still required to submit a return to Revenue containing his or her self-assessment. It is important to note that Revenue does notvalue individual properties for the purposes of selecting the amount of LPT to be used in the ‘Notice of Estimate’.

Revenue will accept, on a non-judgemental basis, liable persons’ self-assessed valuations, subject to the usual compliance checks that may subsequently be carried out in relation to all self-assessed taxes. Revenue is preparing extensive guidance that will be made available to property owners in advance of the issuing of returns to assist them in self-assessing the value of their property.

Regarding new build properties, Revenue will not be in a position to analyse the data and report quantitatively on these until after LPT returns are submitted and processed.

As is currently the case, Revenue will provide a wide range of payment options to liable persons which will allow them to choose the payment option that best suits their particular circumstances.  Payment of LPT liabilities for 2022 can be made in one single payment or can be phased evenly over the year from January 2022.  Details of the payment options available to liable persons will be provided with the issuing of LPT return forms.

Matt Shanahan (Waterford, Independent)
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271. To ask the Minister for Finance if he will provide clarity in relation to the way his Department recognises cohabiting couples (details supplied); his views on whether this is a serious inconsistency in the system; and if he will make a statement on the matter. [37549/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that where a couple is cohabiting, rather than married or in a civil partnership, each partner is treated for the purposes of income tax as a single person. This means that each partner is chargeable to tax on her/his own income and is entitled to the basic annual personal tax credit of €1,650. Neither partner will be entitled to the increased standard rate cut-off point and, tax credits, tax bands, and reliefs cannot be transferred from one partner to the other.

Parts 44 and 44A of the Taxes Consolidation Act 1997 provide for joint assessment of a couple for tax purposes. However, joint assessment is available only to married persons or civil partners who live together. Joint assessment for other cohabiting couples is not provided for in the tax code.

Information on the taxation of cohabiting couples can be found on the Revenue website, available at .

The basis for the current tax treatment of married couples derives from the Supreme Court decision in Murphy v. Attorney General (1980). This decision was based on Article 41.3.1 of the Constitution which compels the State to protect the institution of marriage. The decision held that it was contrary to the Constitution for a married couple, both of whom are working, to pay more tax than two single people living together and having the same income.

Differences in the tax treatment of the different categories of couples arise from the objective of dealing with different circumstances while also respecting the constitutional requirement to protect the institution of marriage. Cohabitants do not have the same legal rights and obligations as a married couple or couple in a civil partnership which is why they are not accorded similar tax treatment to couples who have a civil status that is recognised in law. Any change in the tax treatment of cohabiting couples can only be addressed in the broader context of future social and legal policy development in relation to such couples.

From a practical perspective, it would be very difficult to administer a regime for cohabitants which would be the same as that for married couples or civil partners. Married couples and civil partners have a verifiable official confirmation of their status. It would be difficult, intrusive and time-consuming to confirm declarations by individuals that they were actually cohabiting. It would also be difficult to establish when cohabitation started or ceased. There would also be legal issues with regard to ‘connected persons’. To counter tax avoidance, ‘connected persons’ are frequently defined throughout the various Tax Acts. The definitions extend to relatives and children of spouses and civil partners. This would be very difficult to prove and enforce, in respect of persons connected with a cohabiting couple where the couple has no legal recognition. There may be an advantage in tax legislation for a married couple or civil partners as regards the extended rate band and the ability to transfer credits. However, their legal status has wider consequences from a tax perspective both for themselves and persons connected with them.

Furthermore, the difference in tax treatment for married couples is not confined to Income Tax, and is also a feature of other taxes, such as Capital Acquisitions Tax. Therefore, any changes in the tax treatment could only be considered in the broader context of the tax system and future social and legal policy development more generally, given that the legal status of married couples has wider consequences than from a tax perspective.

The arrangements and associated legislation for the purposes of payments or allowances under the remit of the Department of Social Protection in relation to married couples, civil partners and cohabiting couples are a matter for the Minister for Social Protection and her Department.