Barry Ward (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context

137. To ask the Minister for Finance if any review or research has been carried out into the potential cost to the Exchequer of waiving the cost of local property tax for all those in receipt of the state pension; and if he will make a statement on the matter. [66404/25]

Barry Ward (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context

138. To ask the Minister for Finance if any review or research has been carried out into the potential cost to the Exchequer of waiving the cost of local property tax for all those in receipt of the widows pension; and if he will make a statement on the matter. [66405/25]

Barry Ward (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context

139. To ask the Minister for Finance his views on the merits of conducting an overall assessment of the existing local property tax scheme to create a more equitable system based on ability to pay rather than property value; and if he will make a statement on the matter. [66406/25]

Barry Ward (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context

140. To ask the Minister for Finance his views on the merits of waiving the cost of the local property tax for all those in receipt of the widows pension; and if he will make a statement on the matter. [66407/25]

Barry Ward (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context

141. To ask the Minister for Finance his views on the merits of waiving the cost of the local property tax for all those in receipt of the State pension; and if he will make a statement on the matter. [66408/25]

Simon Harris (Wicklow, Fine Gael)
Link to this: Individually | In context

I propose to take Questions Nos. 137, 138, 139, 140 and 141 together.

Local Property Tax (LPT) was legislated for in 2012 in the Finance (Local Property Tax) Act 2012. The design of LPT was considered by an interdepartmental group chaired by Dr. Don Thornhill. In 2015, Dr. Thornhill also produced a review of the operation of the LPT. The tax was subject to another review in 2019 by an interdepartmental group chaired by the Department of Finance.

The potential impact of a waiver on LPT for those in receipt of the State Pension or Bereaved Partner’s Pension (formerly known as the Widows Pension) was not examined as part of these reports. I am advised by Revenue that it is not possible to conduct the analysis identified by the Deputy because there is no marker on a LPT return to indicate that the owner is in receipt of a State payment.

Regarding an assessment of the current LPT structure, in advance of revaluation this year, officials in Revenue’s Statistics Branch conducted an extensive modelling and valuation exercise in respect of LPT liable properties. The purpose of this work was to inform policy decisions and to assist with providing guidance to taxpayers on the valuation of their properties ahead of this November. A paper outlining the process was published in September and is available on Revenue’s website: www.revenue.ie/en/corporate/documents/research/property-valuation-technical-paper-2026.pdf.

Revenue collaborated with the Department of Finance in respect of various scenarios and their estimated impacts under the model. This collaboration allowed Department officials to prepare options for Minister Donohoe to consider in respect of revaluation, taking into account the Programme for Government commitment, the impact on property owners and the overall tax yield.

The changes to LPT that have been implemented will ensure that the majority of homeowners remain in the same valuation band and pay between €5-25 in extra LPT for 2026 onwards. This represents the first increase in LPT charges since the introduction of the tax in 2013. Accordingly, Government have agreed it is fair to ask property owners to pay a small amount more going forward, with the result of raising approximately €45 million of additional funding for local services.

Furthermore, Government approved the indexation of the income thresholds for deferral of LPT for 2026-2030, ensuring that the thresholds keep pace with inflation and growth in wages and State payments since 2021.

A small number of properties will move up a band due to significant appreciation in value since 2021. It was not possible to ensure these properties would remain in their current band without consequentially causing many other properties to drop one or more bands. I believe that we have struck an appropriate balance with the charging mechanism for 2026-2030.

On the introduction of the LPT, the Government decided that a liability to the tax should apply to all owners of residential properties with a limited number of exemptions. Limiting the exemptions available allows the rate to be kept low for those liable persons who do not qualify for an exemption. There is no specific exemption from the requirement to pay LPT for property owners in receipt of the State Pension or Bereaved Partner’s Pension under the Finance (Local Property Tax) Act 2012 (as amended), though such persons may be entitled to an exemption on other grounds or may qualify for a deferral subject to meeting the qualifying conditions.

As mentioned, homeowners have the possibility of deferring the charge to LPT in certain circumstances. A qualifying person may opt to defer, or partially defer, payment of the tax. Where a person qualifies for a full deferral, 100% of the liability can be deferred. Where a person qualifies for partial deferral, then 50% of the liability can be deferred. The balance of 50% 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 at 3% per annum on the deferred amount. Further information regarding the deferral of LPT is available on the Revenue website at: www.revenue.ie/en/property/local-property-tax/deferral-of-payment/index.aspx.

For the LPT valuation period 2026-2030, the income threshold for a single person to qualify for a full deferral is €25,000, and for a partial deferral is €40,000. For a couple, the income threshold to qualify for a full deferral is €40,000, and for a partial deferral is €55,000.

It is also possible to apply for a deferral on the grounds of hardship where 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.

Any property owners experiencing difficulties can avail of a wide range of flexible payment options both in respect of their LPT 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.

For these reasons, it is my view that a property tax system that is calculated on the basis of property value, with supports in place for those who need assistance, is appropriate and fair.

Barry Ward (Dún Laoghaire, Fine Gael)
Link to this: Individually | In context

142. To ask the Minister for Finance if he will consider extending the provisions of the commuter ticket incentive so as not to disadvantage commuters who are just outside the band; and if he will make a statement on the matter. [66409/25]

Simon Harris (Wicklow, Fine Gael)
Link to this: Individually | In context

Thank you for your question where I will assume you are referring to the TaxSaver scheme. The scheme is provided for by section 118(5A) of the Taxes Consolidation Act 1997 (TCA) and allows for an exemption from benefit-in-kind (BIK) in the case where an employer purchases a travel pass for one of their employees or directors.

Section 118B TCA also provides for that an employer and employee may enter into a salary sacrifice arrangement in exchange for a travel pass and as such BIK does not come into play.

Where a travel pass is purchased either under the TaxSaver scheme or through a salary sacrifice arrangement, certain conditions must be met including:

• the cost incurred must relate to a monthly or annual bus, railway or ferry travel pass;
• the travel pass must be issued by or on behalf of one or more approved transport providers; and
• the approved transport provider must be contracted or licensed to provide the transport services covered by the travel pass.

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
Link to this: Individually | In context

143. To ask the Minister for Finance if he will review the current VAT treatment applied to bus and coach operators; if he is aware that only tour operators are eligible to reclaim VAT on the purchase of new buses under the VAT 71 scheme, while school-bus and mixed-service operators who operate on significantly lower annual mileage and turnover are excluded; if he will assess the impact that this differential treatment is having on fleet renewal, vehicle supply, and costs faced by operators, particularly given the nationwide shortage of available buses and increased demand arising from new Local Link and public-transport services; if he will consider extending VAT recovery eligibility to all licensed bus operators to support the purchase of new vehicles and improve fleet quality; and if he will make a statement on the matter. [66431/25]

Ken O'Flynn (Cork North-Central, Independent Ireland Party)
Link to this: Individually | In context

144. To ask the Minister for Finance if he will examine the impact of VAT and customs duties on buses being imported from the UK by Irish operators; if he will consider measures to reduce the cost burden, given the current shortage of buses in the State; and if he will make a statement on the matter. [66432/25]

Simon Harris (Wicklow, Fine Gael)
Link to this: Individually | In context

I propose to take Questions Nos. 143 and 144 together.

The VAT treatment of goods and services is subject to EU VAT law, with which Irish VAT law is obliged to comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they fall within categories of goods and services specified in the Directive, in respect of which Member States may apply a lower rate, subject to strict rules including limits on the numbers of categories to which lower rates may be applied.

The Directive also requires that goods imported into a Member State from outside the EU are subject to VAT at the point of importation, and imported goods are liable to VAT as would apply if the goods were sold within the State.

Buses are not included in the categories of goods and services on which the EU VAT Directive allows a lower rate of VAT to be applied, and so they are liable to VAT at the standard rate – which in Ireland is currently 23% – when they are supplied in the State or when they are imported into the State from Great Britain or another third country. If buses are purchased by a business in the State from a business in another EU country or in Northern Ireland, then the Irish business must self-account for the VAT at the standard rate to Revenue.

The rate of VAT applying to buses in Ireland could only change if the standard rate of VAT were changed, however, all goods and services currently taxed at the standard rate would also be subject to such a change.

The EU VAT Directive allows for historic VAT treatment to be maintained by a Member State under certain conditions and, on this basis, Ireland has retained its application of VAT exemption to the transport of passengers and their accompanying baggage. This means that, under Ireland’s VAT rules, suppliers of passenger transport services, including school transport, do not register for VAT, do not charge VAT on the supply of their services and, consequently, have no VAT recovery entitlement on their input costs.

In accordance with the EU rules, Ireland may continue to apply this historic VAT exemption on the supply of domestic passenger transport but, for as long as the exemption remains, the conditions under which the exemption was granted cannot be changed. The introduction of a new entitlement to VAT recovery for the passenger transport sector could only be done if Ireland were to decide to end its historic exemption for the sector and bring passenger transport services into the VAT net; this would then require suppliers to register for VAT and require them to charge VAT on their passenger fares, including school transport. While the EU Directive permits a Member State to apply a zero rate of VAT to passenger transport services thereby enabling deductibility, this option is not currently open to Ireland because we already apply the Directive’s zero-rating to the maximum number of categories that is permitted.

Ireland has also maintained a relieving provision, the Value Added Tax (Refund of Tax) (Touring Coaches) Order of 2012, which provides for a refund of VAT on the cost of acquiring certain tour coaches by qualifying businesses. One of the key conditions of the Order, is that qualifying business is engaged in the business of carriage for reward of tourists by road under contract for group transport and that the vehicle is in that business. The Order does not extend to school transport.

The Deputy is asking about the possibility of extending the scope of the Order to all licensed bus operators, thereby allowing them to reclaim VAT on the purchase of new buses. Such a measure would not be compatible with the EU VAT Directive, particularly having regard to the conditions under which Ireland is permitted to maintain its historic VAT exemption for passenger transport.

Customs duty needs to be considered in relation to goods brought into State from outside the EU but not for the movement of goods within the EU. Customs duty rates are determined by the EU and as Customs is an EU competence, it is not possible for Ireland to apply a different rate as Customs duty rates are common across all Member States.

Buses imported into the State are generally subject to a customs duty of around 10% or 16% depending on the type of engine. However, imports of new and second-hand buses from the Great Britain (GB) into Ireland can claim a preferential tariff rate of 0% under the EU-UK Trade and Cooperation Agreement (TCA) where they can provide documentary proof that the bus is of UK origin. The documentation proving UK origin should be included with the Customs import declaration to allow the bus to be released to their owners in a timely manner. The proofs required to claim preferential origin are detailed in the TCA and are the same as the proofs required in other trade agreements that the EU has entered into, and generally come from the exporter, via the bus supplier or manufacturer.

There is also a Returned Goods Relief which may be available if the bus was originally exported from the EU to the UK, has not been altered and is being re-imported into the EU within three years of export. In accordance with the EU Customs Code, there are specific proofs required to qualify for the relief from Customs Duty and import VAT. In such circumstances, guidelines to the trade are updated regularly on the Revenue website and through Revenue’s direct communication to the trade via eCustoms Notifications.

Goods re-imported into the European Union guidelines: www.revenue.ie/en/customs/businesses/relief-duty-vat/reimported-into-eu/index.aspx.

eCustoms notifications: www.revenue.ie/en/customs/businesses/electronic-systems/ais/ecustoms-notifications/index.aspx.