Éamon Ó Cuív (Galway West, Fianna Fail)
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141. To ask the Minister for Finance if he plans to increase the threshold on the small benefit exemption scheme on a once-off basis in 2021 in the Finance Bill to allow employers show appreciation to their staff for their commitment during Covid-19; and if he will make a statement on the matter. [54331/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the small benefit exemption provides that a charge to tax will not arise where, subject to certain conditions, an employer provides a director or employee with a ‘qualifying incentive’.

A qualifying incentive may be a voucher or other tangible benefit, but it cannot exceed €500 in value. If the value of the incentive exceeds €500, then the entire amount is liable to income tax, PRSI and USC.

In addition, the incentive cannot be part of any salary sacrifice arrangement between the employee and employer. In the case of any voucher awarded, it must only be used to purchase goods or services and will not be a qualifying incentive for the purpose of this exemption if it is capable of being exchanged, in part or in full, for cash.

The legislative provisions set out that the small benefit exemption only applies to one qualifying incentive per year. Therefore, where an employer issues more than one qualifying incentive in a year then only the first of those incentives qualifies for this exemption. Any subsequent incentives issued by the employer will normally be liable to income tax, PRSI and USC irrespective of their value. However, in March 2020, Revenue concessionally agreed to waive this requirement.

For the 2020 and 2021 years of assessment the small benefit exemption may therefore apply to two qualifying incentives in each year. All other conditions relating to the small benefit exemption continue to apply in the usual manner. For example, the maximum cumulative value of the two incentives cannot exceed €500.

This concessionary measure was introduced to enable employers to recognise the efforts of their staff in light of the unprecedented impact of the COVID-19 pandemic. This concession therefore only applies to employees who have continued to work during the course of the pandemic.

Further information on the small benefit exemption is available on the Revenue website or in Tax and Duty Manual Part 05-01-01e.

I have no plans to make other changes to the small benefit exemption.

Pádraig O'Sullivan (Cork North Central, Fianna Fail)
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142. To ask the Minister for Finance if he will review the local property tax exemptions for unfinished estates; and if he will make a statement on the matter. [54248/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Finance (Local Property Tax) Act 2012 (as amended) provides for certain properties to be exempt from LPT during the current valuation period (2013 to 2021) and the next valuation period (2022 to 2025) where they meet certain qualifying conditions. However, certain exemptions will expire on 31 December 2021 and will not be available for the new valuation period. These include the exemptions for properties in unfinished housing estates; for properties purchased as a home during 2013; and for unsold properties held by builders or developers and new or unused properties purchased from a builder or developer.

The 2019 Interdepartmental Review of the LPT recommended that all of the LPT exemptions should be reviewed regularly and kept to a minimum in order to keep the base broad and minimise the impact on those paying the tax, an approach the Oireachtas Committee on Budgetary Oversight endorsed in its Scrutiny Report on the review of LPT of September 2019. In its 2019 report the LPT Review Group noted the demand level for residential property and the small number of unfinished estates remaining and concluded that there was no objective justification for continuation of the unfinished homes LPT exemption and accordingly recommended that it be allowed to lapse.

In reaching this conclusion the Group noted that, according to information provided by the Department of Housing, Local Government and Heritage, there had been a 91% reduction in the number of unfinished developments since 2010 from almost 3,000 to 256. I understand that of the 256 developments surveyed, the number of developments classified as ‘unfinished’ fell further to 124 developments nationally in a 2020 survey which is a 96% reduction from the initial number of unfinished developments surveyed in 2010. Ending this exemption helps to maintain the base for the tax and is consistent with the principle underlying the LPT that exemptions should be kept to a minimum so the rate can be kept as low as possible for those liable to pay the tax.

I would note that revenue from the LPT accrues to local authorities and supports the provision of local services. Local authorities provide a broad range of services in the public realm, which benefit the wider community. The proper functioning of these services is important for the wellbeing of every community and household. These include fire and emergency services; road maintenance and cleaning; street lighting; spatial and development planning and other similar services; regulatory and inspection functions and business support services, as well as libraries, parks, and other recreation and cultural public amenities. The benefits of these services accrue to all members of society.

I have no plans to extend any of the LPT exemptions that are due to expire on 31 December 2021 including in relation to properties in unfinished housing estates.