Jim O'Callaghan (Dublin Bay South, Fianna Fail)
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122. To ask the Minister for Finance the estimated cost of extending the eligible period for expenses incurred under the tax deduction for expenditure on retrofitting for landlords measure to 2030. [40263/24]

Jack Chambers (Dublin West, Fianna Fail)
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Section 97B of the Taxes Consolidation Act 1997 which provides a deduction from rental income for expenses incurred by landlords in retrofitting residential rental properties. The deduction was introduced in Finance Bill 2022 to incentivise retrofitting of residential rental properties and to encourage landlords to retain these properties in the rental market.

The estimated cost of the scheme in 2024 is €20.8m. As such, it is estimated the cost of extending the relief to 2030 would be of the order of €20.8 million for each additional year it applies.

Jim O'Callaghan (Dublin Bay South, Fianna Fail)
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123. To ask the Minister for Finance the estimated cost of extending pre-letting expenses tax deductions to 2030. [40264/24]

Jack Chambers (Dublin West, Fianna Fail)
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Section 97A Taxes Consolidation Act 1997, introduced in Finance Act 2017, allows a deduction (capped at €10,000 per premises) from rental income for certain pre-letting expenditure on properties which have been vacant for at least six months and are subsequently let. To qualify, the expenditure must be incurred in the twelve months immediately prior to the letting.

Finance Act 2022 increased the maximum allowable deduction from €5,000 to €10,000 and decreased the vacancy period from 12 months to six months, in accordance with a commitment in the Housing for All Action Plan.

The purpose of the measure is to encourage owners of vacant residential property to bring that property into the rental market, for a minimum of four years. The expenditure must be such as would be allowed against rental income as if it had been incurred during the period of letting.

The estimated cost for this relief in 2025 is €2 million. As such, it is estimated the cost of extending the relief to 2030 would be of the order of €2 million for each additional year in respect of which it applies.

Jim O'Callaghan (Dublin Bay South, Fianna Fail)
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124. To ask the Minister for Finance the estimated first- and full-year cost of applying a 5% to 15% VAT rate at 1% increments under the supply and construction of new social and affordable housing, as part of a social policy as per the EU VAT directive, in tabular form. [40265/24]

Jack Chambers (Dublin West, Fianna Fail)
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While most Member states apply the standard rate to construction services, Ireland historically has applied a 13.5% reduced rate of VAT to all construction services (residential and non –residential) under a derogation from the EU VAT Directive. This derogation however has significant restrictions including that the rate cannot be reduced below 12%.

Since April 2022, under Annex III of the VAT Directive, it is now possible for Ireland to apply a reduced rate of VAT e.g. a 9% rate to the supply and construction of housing, as part of a social policy and to the repair and renovation of residential housing (non-residential construction is not within scope of this reduced rate).

I am advised by Revenue that traders are not required to identify the VAT yield generated from the supply of specific goods or services on their periodic VAT returns. Therefore, Revenue does not have the necessary data using information provided on tax returns to provide an accurate estimate of the VAT yield arising from social and affordable housing construction.

However, using third-party sources, for each 1% change to the VAT rate the full year cost is estimated at €55m. First year estimates are not available for this proposal but in general, because VAT is collected in the VAT period following the payment, the first year cost will be five sixths of the total year cost. As an example, the full year cost of moving the VAT rate for social housing from the 13.5% VAT rate to the 9% VAT rate is estimated to be €247.5m and the first year cost is estimated to be €206.25m.

It should be noted that the VAT treatment of goods and services is subject to EU VAT law, with which Irish VAT law must comply. The Directive only allows Member States to apply two reduced rates of VAT between 5% and 15%. Ireland currently applies a 13.5% reduced VAT rate and 9% reduced VAT rate. The estimate provided does not reflect the cost of moving other items currently applying the 13.5% and 9% VAT rate to other rates.

Jim O'Callaghan (Dublin Bay South, Fianna Fail)
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125. To ask the Minister for Finance the estimated revenue from the residential zoned land tax per annum. [40266/24]

Jack Chambers (Dublin West, Fianna Fail)
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The Residential Zoned Land Tax (RZLT) is a new tax introduced in Finance Act 2021 which seeks to increase housing supply by encouraging the activation of development on lands which are suitably zoned and appropriately serviced. It aims to bring those lands which have benefitted from investment in services and are capable of being developed forward for housing, rather than to raise revenue.

The tax measure is a key pillar of the Government’s response to address the urgent need to increase housing supply in suitable locations. However, it is important that affected landowners have sufficient opportunity to engage with the mapping process and that a fair and transparent process is applied when local authorities consider what land should be placed on the RZLT maps. Therefore, as part of Budget 2024, it was decided to extend the initial liability date of the tax by one year, from February 2024 to February 2025.

The purpose of this deferral was to allow for the annual mapping cycle to complete and afford landowners another opportunity to make submissions if their land is included on the maps prepared by local authorities.

In relation to the Deputy's question regarding the estimated revenue from the residential zoned land tax per annum, it is not possible to estimate a projected revenue at this time.

Revised final maps will be published by the local authorities on 31 January 2025. Once landowners register for the liability in May 2025, I will be in a better position to provide an estimate of the projected revenue from the RZLT per annum.