Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 325 and 326 together.

As the Deputy will be aware, it is a long-standing practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.

It is possible for Ireland to apply the 9% reduced VAT rate to the supply and construction of housing, as part of a social policy and to the repair and renovation of residential housing. However as I have noted previously, having two separate VAT rates applying to construction services would introduce significant complexity to the sector and risks possible underpayments of VAT. There is also no obligation for any VAT reduction to be passed to the final consumer.

It is not possible to estimate a cost for this measure as traders are not required to separately identify the VAT generated from the sale or supply of specific products or services in their VAT returns.

Paschal Donohoe (Dublin Central, Fine Gael)
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The Local Property Tax (LPT) was introduced in 2013 to provide a stable and sustainable funding base for local authorities and is a significant base-broadening measure. LPT has yielded over €4 billion for Local Authorities since its introduction.

All property owners benefit from the essential local services LPT helps to fund. The proper functioning of these services is important for every community and household. Accordingly, it is equitable that the cost of providing the services should be shared by as broad a spectrum of owners as possible. If the tax were abolished, the funding gap would ultimately need to be met by the Exchequer in the form of increased general taxation. For these reasons, I do not plan to abolish the Local Property Tax.

The Finance (Local Property Tax) (Amendment) Act 2021 fulfils the Programme for Government commitment to bring forward legislation in relation to LPT on the basis of fairness and that most homeowners would face no increase in their LPT liability. The Act provides for a cut in the main rate of the tax and widening of the valuation bands to make the changes affordable. As these changes were implemented for the 2022 LPT year, this meant that the majority of homeowners saw either a decrease or no change in their LPT liability. Where increases arose, the majority were by a single band.

The LPT legislation provides for the possibility of deferring the charge to LPT in certain circumstances to assist individuals who may have difficulty paying the tax. A qualifying person may opt to defer, or partially defer, payment of the tax. Where a person qualifies for a full deferral then 100 per cent of the liability can be deferred. Where a person qualifies for partial deferral, then 50 per cent of the liability can be deferred. The balance of 50 per cent of the tax must be paid. The deferred tax remains as a charge on the property and must be paid before a sale or transfer can be completed. Interest is charged on the deferred amount. The interest charge is 4% per annum for LPT deferred for years 2013 to 2021; and the rate was reduced to 3% per annum for LPT deferred for the year 2022 and subsequent years. The income thresholds were increased in 2022 and are now €18,000 for a single person and €30,000 for a couple to qualify for a full deferral. The income limits to qualify for a partial deferral are €30,000 for a single person and €42,000 for a couple. It is also possible to apply for a deferral on the grounds of hardship if a person suffers an unexpected and unavoidable significant loss or expense as a result of which a person cannot pay their LPT liability without suffering financial hardship. Further information regarding the deferral of LPT is available on the Revenue website at: www.revenue.ie/en/property/documents/lpt/guidelines-for-deferral-of-lpt.pdf.

I am advised by Revenue that it has engaged extensively with residential property owners who are experiencing financial difficulties, to agree flexible LPT payment arrangements that best suit their circumstances and avoid unnecessary hardship, and Revenue has assured me that this will continue to be the case.

Any property owners experiencing financial difficulties can avail of a wide range of flexible payment options both in respect of 2022 liabilities and for any previous years where liabilities remain outstanding. The full range of payment options, which includes phased arrangements, are available to property owners on the Revenue website at: www.revenue.ie/en/property/local-property-tax/paying-your-lpt/index.aspx.

The LPT payment compliance rate for 2022 currently stands at 95%. Payment of the LPT for 2023 is not due until January 2023, at the earliest.

Finally, property owners experiencing difficulties in meeting their LPT obligations can contact Revenue through MyAccount at www.revenue.ie or by calling the LPT helpline (01) 7383626.