Thursday, 16 December 2021
Department of Finance
139. To ask the Minister for Finance if his Department plans to apply reduced VAT rates on the supply and installation of highly efficient low-emissions heating systems as per Annexe 3 in view of the agreement reached on 7 December 2021 by the Council of the European Union (details supplied); and if he will make a statement on the matter. [62408/21]
149. To ask the Minister for Finance if his Department intends to apply reduced VAT rates on the supply, rental and repair of bicycles including e-bikes in view of the agreement reached on 7 December 2021 by the Council of the European Union (details supplied); and if he will make a statement on the matter. [62252/21]
155. To ask the Minister for Finance if, in view of the agreement reached on 7 December 2021 by the Council of the European Union (details supplied), his Department intends to apply reduced VAT rates to solar panels in line with section 4a; and if he will make a statement on the matter. [62253/21]
I propose to take Questions Nos. 139, 149 and 155 together.
As the Deputies will be aware, the Commission issued its original proposal to amend a Council directive on the common system of value added tax as regards rates of value added tax on 18 January 2018.
The compromise text agreed at ECOFIN has been amended significantly in comparison to the original proposal so the EU Parliament will once again be consulted for their opinion.
Once the Parliament has issued its opinion on the proposal, the Council will formally adopt the directive. It will then enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
Officials in my Department will be reviewing the options now available to Ireland in setting VAT rates.
Future tax changes are generally taken in the context of the Budget. Deputies will be aware that my officials prepare a series of papers containing tax options for the Tax Strategy Group to be considered in the context of the budgetary process, alongside a wide range of submissions from various stakeholders and lobby groups.
140. To ask the Minister for Finance the position regarding the zoned land tax; the provisions being put in place to facilitate its introduction; if a timeline will be provided for its roll-out; and if he will make a statement on the matter. [62213/21]
The Finance Bill introduces Part 22A into the Taxes Consolidation Act 1997, which gives effect to the measure I announced on Budget day regarding the Residential Zoned Land Tax. This measure is a part of the ‘Housing for All’ Strategy published by the Department of Housing, Local Government and Heritage in September 2021.
The Residential Zoned Land Tax is designed to prompt residential development by owners of land that is zoned for residential or mixed use purposes and that is serviced, and its primary objective is to increase the supply of housing rather than to raise revenue.
The Residential Zoned Land Tax is an annual tax, calculated at 3% of the market value of the land. The legislation provides that each local authority will prepare and publish a map identifying land within the scope of the tax. These maps will be updated annually for changes in zoning and servicing of the land. Landowners will have an opportunity to submit an appeal against inclusion on the map to the local authority in the first instance, and subsequently to An Bord Pleanála where the local authority upholds their original decision.
A number of exclusions from the scope of the tax have been provided for, including existing habitable
dwellings and the curtilage, certain infrastructure or facilities, a site which is designated as a derelict site and liable for the Derelict Sites Levy, land zoned residential but used by a business to provide services consistent with a residential area, and land in an area zoned for a mixture of uses, where it is used for business purposes - in other words it is not deemed to be vacant or idle.
In relation to the Deputy's question regarding a timeline for the rollout of the measure, an owner who has land which was zoned and serviced on 1 January 2022, and who has not commenced development of the land before 1 February 2024, will be subject to a charge which will be due and payable in May 2024. Where the land is zoned or serviced after 1 January 2022, tax will be chargeable in the third year after it comes within scope.
The Residential Zoned Land Tax will operate on a self-assessment basis and will be administered by the Revenue Commissioner. The legislation requires landowners to maintain detailed records so that the Revenue Commissioner may verify tax payable as well as claims for exemption, abatement or deferral of the tax.