Barry Ward (Dún Laoghaire, Fine Gael)
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353. To ask the Minister for Finance if he will consider providing tax deductibility at the lower rate for any person employing staff on a full-time basis, for whatever purpose but particularly for childcare, or other care, purposes; and if he will make a statement on the matter. [2074/25]

Jack Chambers (Dublin West, Fianna Fail)
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I am advised by Revenue that there is tax relief available to individuals who have incurred costs in employing a person to take care of himself or herself, or a spouse or a relative in certain circumstances.

Section 467 of the Taxes Consolidation Act (“TCA”) 1997 provides for relief for employing a carer where the person being cared for is incapacitated by reason of physical or mental infirmity. The relief is available in respect of the costs incurred by an individual of employing another person, including a person whose services are provided by or through an agency, to take care of himself or herself, a spouse, or a relative, who, throughout the relevant tax year, is totally incapacitated by reason of physical or mental infirmity – subject to a maximum expenditure of €75,000 in the case of each incapacitated person. “Relative” in this context includes a relation by marriage and a person in respect of whom the individual is or was the legal guardian.

The tax relief, which is granted by reducing the individual’s taxable income, is allowed at the individual’s marginal rate of income tax (up to 40%) in respect of expenditure up to €75,000 in each case of an incapacitated person. Any amount recoverable from the HSE, or any other source, in respect of costs incurred in employing a carer, does not qualify for relief. Where two or more persons employ the carer, the allowance of €75,000 is apportioned.

Detailed guidance on tax relief for employing a carer can be found in Revenue’s Tax and Duty Manual Part 15-01-20, which can be accessed using the following link:

www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-20.pdf.

By way of background, where an individual directly employs a carer for an incapacitated individual as detailed above or employs someone in ‘domestic employment’, he or she has certain obligations as an employer under section 985 TCA 1997, including registering with Revenue as an employer and making the appropriate Income Tax, USC and PRSI deductions from the wages paid to the employee.

Where an individual directly employs someone in ‘domestic employment’, it is chargeable to income tax and USC and qualifies for the employee tax credit. The amount of tax due, if any, will depend on the circumstances of each case.

A ‘domestic employee’ is an individual, e.g., an Au Pair, who is employed by a domestic employer solely on domestic duties (including the minding of children) in the employer’s private dwelling house. The domestic employee may have other employments with different employers.

Under section 986(6) of TCA 1997, certain qualifying employers (‘domestic employers’) who employ an individual to provide domestic duties for a few hours a week are removed from this obligation to register as an employer.

A qualifying ‘domestic employer’ is one who:

• is an individual (organisations, companies, clubs etc. do not qualify),

• has only one domestic employee who is employed solely on domestic duties in the home, and

• pays less than €40 a week to that employee.

A domestic employer who:

• pays €40 or more a week to a domestic employee, or

• has more than one domestic employee concurrently,

must register as an employer and operate PAYE in the normal way.

Where the domestic employer is a qualifying domestic employer and is therefore not required to register as an employer, they are however, liable to pay employer’s PRSI at the rate of 0.5% (Class J). The domestic employer should register with the DSP at the commencement of the employment. The PRSI is payable by the employer in a single sum at the end of the tax year to the PRSI Special Collection Section of DSP.

Detailed information on the process to register as an employer for Pay As You Earn (“PAYE”) can be found on Revenue’s website using the following link:

www.revenue.ie/en/employing-people/becoming-an-employer-and-ongoing-obligations/registration-of-employers-for-paye-purposes/index.aspx#:~:text=If%20you%20hire%20an%20employee,ROS)%20before%20paying%20your%20employee.

For information on PRSI, please see leaflet SW14 - the Employers’ Guide to PRSI Contributions on the Department of Social Protection (“DSP”) website which can be found at the below link:

www.gov.ie/en/publication/d00d4-prsi-employer-guide/#prsi-contribution-rates-and-user-guide-sw14.

In regard to the introduction of any new measure proposals for tax expenditure measures are assessed in accordance with my Department's Tax Expenditure Guidelines. These make clear that any policy proposal which involves tax expenditures should only occur in limited circumstances where there are demonstrable market failures and where a tax-based incentive is more efficient than a direct expenditure intervention.

Furthermore, I must always be mindful of the public finances and the many demands on the Exchequer. Tax reliefs, no matter how worthwhile in themselves, lead to a narrowing of the tax base and a strong and convincing case for the benefits and outcomes needs to be articulated in order for due consideration to be given for the commitment of scarce taxpayer resources for such reliefs.

I have no plans at present for a new tax measure along the lines suggested by the Deputy.

Barry Ward (Dún Laoghaire, Fine Gael)
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354. To ask the Minister for Finance if he will further increase the level at which liability for capital acquisitions tax accrues, specifically to return it to at least €500,000; and if he will make a statement on the matter. [2076/25]

Jack Chambers (Dublin West, Fianna Fail)
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You have clarified that you are referring to the Capital Acquisition Tax (CAT) Threshold A. CAT is a tax which applies to both gifts and inheritances. For CAT purposes, the relationship between the person giving a gift or inheritance (i.e. the disponer) and the person who receives it (i.e. the beneficiary) determines the maximum amount, known as the “Group threshold”, below which CAT does not arise.

In Budget 2025, the Group A threshold was increased from €335,000 to €400,000, Group B from €32,500 to €40,000 and Group C from €16,250 to €20,000.

You should be aware that there would be a significant cost in making further substantial changes to the CAT thresholds. The options available for setting CAT thresholds must be balanced against competing demands, and as part of the annual Budget and Finance Bill process.

Barry Ward (Dún Laoghaire, Fine Gael)
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355. To ask the Minister for Finance if he will give consideration to varying the rate of capital acquisitions tax when it comes to residential property; and if he will make a statement on the matter. [2077/25]

Jack Chambers (Dublin West, Fianna Fail)
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Capital Acquisition Tax (CAT) is a tax on gifts and inheritances. Individuals may receive gifts and inheritances up to a set threshold over their lifetime before having to pay CAT. Once due, it is charged at the rate of 33%. In Budget 2025, the Group A threshold was increased from €335,000 to €400,000, Group B from €32,500 to €40,000 and Group C from €16,250 to €20,000.

It is worth noting that there is an exemption from CAT where dwelling houses are bequeathed to individuals who:

• have lived there for a specified period of time before the inheritance,
• will continue to live there for a specified period of time after the inheritance, and
• who have no beneficial interest in any other residential property at the date of the inheritance.

You should be aware that there would be a significant cost in making substantial changes to the rate of CAT. The options available for setting CAT rates and thresholds must be balanced against competing demands, and as part of the annual Budget and Finance Bill process.