Vol. 1077 No. 3
1. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance the level of inflation that was projected by his Department as it prepared budget 2026, including the decision not to provide an income tax adjustment for workers; and if he will make a statement on the matter. [64572/25]
Will the Minister outline the level of inflation that was projected when his party decided on the budget of this year? It was a budget that made a decision to pull the cost-of-living supports, such as energy credits and others, and not give any tax break to workers other than a handful of highly paid executives. How does the inflation rate that was projected when the budget was prepared compare to what we are seeing now in real terms? How will this impact on household wages?
At the time of budget 2026, the Department of Finance forecast a headline harmonised indices of consumer prices, HICP, inflation rate of 1.9% for next year. For household incomes, the Department of Finance forecast continued growth in wages per head of 3.9% in 2026. This implies continued growth in real incomes, which will support the purchasing power of households, and is an important indicator of improving living standards. The Department of Finance macroeconomic forecasts were endorsed by the Irish Fiscal Advisory Council, IFAC.
In budget 2026, the Government had to make choices. This budget was designed to boost our economic resilience and to support workers and growth in their income by investing in jobs and in their future. However, with the substantial personal income tax packages implemented over the past four years, the previous Government made significant progress on increasing the entry point to income tax for all income earners and increasing the point at which the higher rate of income tax takes effect. Over recent years, the previous Government provided substantial income tax packages to support workers. Over the lifetime of the previous Government, the main tax credits increased from €1,650 to €2,000, representing an increase of €350 or 21.2%. In addition, the standard rate cut-off point was increased from €35,300 to €44,000, representing an increase of €8,700 or 24.6%.
The income tax measures implemented over the period of the previous Government are expected to be in line with wage growth. In regard to the universal social charge, USC, over the lifetime of the previous Government, the USC ceiling of the band for the 2% rate was also increased by €6,898 from €20,484 to €27,382, in line with the increases to the national minimum wage. Furthermore, there was a significant reduction in the middle rate charge, from 4.5% to 3%. Broadly, the income tax measures implemented over the period of the previous Government are expected to be in line with wage growth.
As the Deputy will be aware, the most recent budget provided a range of support to individuals, families and businesses. In particular, the rent tax credit, introduced in budget 2023, has proved to be a very meaningful support for renters. We have just taken the decision to extend the credit for a further three years to the end of 2028. The ceiling of the second USC rate band is being increased by €1,318 and this will ensure that a full-time worker on the minimum wage who benefits from the increase in the hourly minimum wage rate will remain outside the highest rates of USC.
For the budget in which the Government withdrew supports and broke promise after promise about income tax cuts that were made to workers during in election, the Department expected that inflation would be 1.9% next year and 1.8% this year. Maybe the Minister will outline that inflation is actually way above 1.8%, not far off double that figure. Would the Minister not agree? We understand the flash estimate puts inflation at 3.2%.
Does the Minister have any concern that there are people out there who are finding it really difficult to make ends meet? Many of them are not making ends meet. The Government projected a budget based on a projected rate of inflation that is way lower than what is actually happening in the real, lived experience of people's lives. Will the Minister consider a cost-of-living package or is the message "You are on your own, folks"?
That is not the message. The message is that we took a number of measures in this year's budget that will help families, businesses and workers as well. It includes investing - the Deputy and I have different policy views on this - and deciding to extend the renter's tax credit for a further three years. It includes making sure that people who benefit from the minimum wage increase do not find themselves paying a higher rate of USC, but also investing in protecting people's jobs because that is a very important thing to do. This was the first budget in the lifetime of the Government as well. We will now get back into the normal rhythm of income tax packages in future budgets too.
We took a decision to deliver on a number of commitments that were made, including some that the Deputy supports, such as the reduced VAT rate for the hospitality sector. The benefit of that decision will be seen even more in the time ahead because we are seeing some softening in the labour force figures. Supporting those jobs is important. That helps workers to ensure they can keep their jobs. It helps to keep the businesses in which they work open at a time when there are significant economic headwinds.
As the Deputy knows, there are no plans to reopen the budget. With regard to the Department’s forecasts as, again, the Deputy knows, the Department forecasts a certain rhythm each year and the Irish Fiscal Advisory Council endorses those figures.
Is it not great for someone in the Minister's position to talk about getting back into the "normal rhythm" of something soon? When I go back to Donegal and talk to my constituent who simply cannot heat her home, I will tell her not to worry because the Minister says we are going to get back into the "normal rhythm" of things in a couple of years, closer to an election no doubt. It will be closer to an election because that is what the Minister does. He gives plenty of promises in the run-up to the election but, first thing after an election, promise after promise is broken. The Government brought forward a budget that had inflation rates nearly half of what they are currently. Things are worse off. That is why people in wheelchairs were outside the Dáil today. That is why they are coming up in the middle of a storm saying to the Government and the Minister that they need emergency supports this winter. The Minister needs to hear the pleas of the nearly 500,000 people who cannot heat their homes at this point in time, or is the message to them that they have to buckle up and tighten their belts until, in a couple of years’ time and closer to a general election, it will be okay again and we will get back into the "normal rhythm" of things?
That is not the message at all. The Deputy and I rightly discuss the issues of fuel poverty and energy prices in this House regularly, as we should. What I say to the people is that we have taken a number of measures to assist with the cost of energy, including the reduction of the VAT rate to 9%, a real budgetary cost that we decided to prioritise.
They are higher than ever.
We decided to do that.
But they are higher than ever.
Did we or did we not-----
The Minister promised to reduce energy costs.
We will have lots of time. We are going to have lots of time. It just gets a bit tiresome when the Deputy just shouts me down.
I am not shouting.
Or interjecting.
I am just reminding the Minister of what he said.
For the people watching at home, I get a bit of time to speak and then the Deputy gets a bit of time to speak. I want people to know that we took a decision to reduce the VAT rate on people's energy bills and ensure that is in place for a number of years. We took the decision to make sure more people qualify for the fuel allowance than ever before. We took the decision to increase the fuel allowance. We took the decision to make sure working family payment recipients can benefit from the fuel allowance as well. We also took the decision to invest significantly in things that working people in Donegal and right across the country asked us to do in relation to child, children's services, disability services, education-----
The Minister nearly said "childcare" there.
In childcare, too.
The Government broke that promise too.
We put money into capital, State-led childcare facilities for the first time. We extended the renters’ tax credit which was due to expire. We have taken real decisions and it is just the first of five budgets.
2. Deputy Ged Nash asked the Tánaiste and Minister for Finance the details of and timeline for the production of legislation to empower the Revenue Commissioners to implement the proposed new derelict sites tax; if all of the revenue collected will be disbursed to the relevant local authorities; and if he will make a statement on the matter. [65023/25]
A welcome announcement at least was made in the budget in October that this Government would plan to transfer responsibility for collecting derelict sites levies to the Revenue Commissioners and, from then on, the levy would be known as a tax, given the fact that it would be collected by the Revenue Commissioners. This is a welcome development and something for which I have been campaigning and advocating for many years. One of the key things in this regard is that the revenue collected ought to be dispersed directly back to the local authorities involved. The Minister might advise on the position in that regard and what he plans to do to legislate for this announcement that was made in budget 2026.
I thank Deputy Nash for the question. First, we share the same view on the importance of this derelict property tax. In a housing emergency, which we are in, every lever must be used. Having a tax that targets derelict properties is an important one. There is a significant body of work to do, however. I do not say this to in any way cast aspersions but I am conscious that local authorities will have an important role in this regard because when you are moving from a levy to a tax, the importance of consistency will be really important in being able to underpin any tax collected by the Revenue Commissioners.
As the Deputy said, in this budget we announced the introduction of a new derelict property tax. The aim of this tax is to encourage the activation of derelict properties and sites. In fact, not having to collect much money from this tax would ultimately be a good thing if we can change behaviour and get derelict sites and properties back into use. This will replace the derelict sites levy and it will be collected by the Revenue Commissioners. In order for the new tax to be successful on introduction, care has to be taken in its design. A key issue is that the tax must apply in a consistent manner to all residential properties and sites that are derelict. Therefore, a lead-in time will be required for our local authorities to identify all the relevant derelict properties in their areas for inclusion on a register in a consistent manner.
I intend to legislate for the derelict property tax in 2026. This is dependent on engagement from stakeholders. It will also be influenced by any advice I receive from the Attorney General. The timeline of bringing in the legislation in 2026 is necessary to allow local authorities to prepare and publish a preliminary register of derelict properties in 2027, with the tax coming into effect as quickly as possible thereafter. The yield from the derelict property tax will accrue to the Exchequer. That is the current intention. As the Deputy will appreciate, replacing the current levy with a new tax is a complex process. There is much detail that remains to be worked through regarding the operation of the new tax. I will be in a position to provide further information over the course of next year in advance of the tax being legislated for. I genuinely look forward to engaging with Deputies on the design of the tax through the legislative process.
There is concern at official level in local authorities that it may not be the case that the revenue collected will be dispersed directly back to the local authorities where the subject sites are present. The Minister will understand those concerns. I draw some analogies between the transfer of the household charge, which the Minister will recall from the early 2010s, to the local property tax and how compliance improved. In fact, the transformation of the household charge to the property tax was quite successful from a collection point of view, looking at the compliance figures compared to the collection of the household charge, which was the responsibility of the local authorities at that point in time. It was for good reason that responsibility was transferred. It was done expeditiously and efficiently in a short period of time. Given the fact that we have derelict sites registers available to local authorities across the country, although they may need to be finessed, I do not accept for a minute, given the urgency of this matter, that we ought to wait until 2027 until Revenue has responsibility for collecting these charges.
I appreciate the past examples. I remember soldiering on some of them together in past iterations of government. We need to get this right, however. My predecessor announced that timeline on budget day. I think we will all agree that we actually do not want to collect much revenue from the tax. Rather, we want people to take derelict properties and sites and put them back into use. The purpose of making the budget day announcement, albeit with the lead-in time, was to make it clear to people in this country that if they are sitting on a derelict property or site in a housing emergency, we intend to tax that reality. We intend to do it through the Revenue Commissioners because, as the Deputy rightly said, the Revenue Commissioners are good at collecting tax. That is what we intend to do because, in a housing emergency, we cannot tolerate this situation.
Currently, the derelict site levy is an annual levy of 7% of the land’s market value. While the rate of the derelict property tax is yet to be determined, I will say to the House that it certainly will not be lower than the current 7%. The primary goal will not be to raise revenue but, rather, to encourage owners of derelict properties to bring them back into use. We want to do this as quickly as possible but we also have to make sure it is consistent with all the principles expected in a new tax.
The Minister will know how this works. He will know about the ineffective nature of the Derelict Sites Act and the need for reform in that space. When a local authority identifies an owner of a derelict site or property and, after due process, decides to place that site on a register, the individual may decide to contest that. It then becomes complicated. He or she may potentially challenge the designation of a derelict site through the courts and communities become frustrated.
Dereliction itself is an absolute scourge, regardless of the housing disaster we are experiencing at the moment. It is a public health matter. In fact, the Scottish Administration has designated dereliction as a public health issue, and for very good reasons. The reality is that the Revenue Commissioners are the best-placed agency to collect a levy that will be transformed into a tax for a number of different reasons. Any business owner I know needs to sweat every asset they have. If it is a case that somebody is wealthy enough to be able to preside over a derelict site without using that site to generate some revenue, they must have very deep pockets. Of course, if Revenue is collecting your tax and you are not compliant, then you cannot run your businesses. I get what the Minister is saying in terms of that disincentive piece, which is important, like the vacant homes tax. It is not about collecting tax; it is about incentivising use. I ask and urge the Minister to look again at ensuring the revenues generated and collected are returned to local authorities like the local property tax, by and large.
I genuinely am eager to engage on the design and construct of the new tax and we will have an opportunity to do that through the legislative process. I do also genuinely take the point around the urgency of this, and the Government genuinely does too, but we also have to just make sure we get it right. I am conscious there are local authorities around the country that do very a good job and that are also very busy. This is quite an important and big project for them because we have to have a consistency in terms of this. It cannot be a case of County Wicklow doing one thing in relation to a derelict site levy and County Louth doing another. That is a levy collected by the local authorities. Once this becomes a national tax there has to be that consistent approach.
I agree with the Deputy about dereliction and the housing emergency, absolutely, but dereliction more broadly is a real issue. We will get to some of this later as well, but this is why we have made some changes, for example with the living cities initiatives and the like to try and bring derelict properties back into use, particularly on main streets with over-the-shop schemes as well.
3. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance the number of people that have filed an updated valuation for the LPT that have gone up a band; the average additional cost for those households; and if he will make a statement on the matter. [64573/25]
The local property tax, LPT, increase kicked in last month. The Government has ensured that virtually every household in the State has experienced a property tax increase. Thousands faced a substantial increase as they were pushed into higher valuation bands. Now that the households that are struggling with the cost-of-living crisis have gotten their letters through the door telling them that their property tax is going up, how many have filed updated valuations for the LPT that have gone up a band? What is the average additional cost to those households that have moved into an increased band?
I am advised by Revenue that LPT returns for the next valuation period of 2026 to 2030 have been filed and are fully up to date in respect of over 1.4 million properties. Filing arrangements are being finalised in respect of a further 202,278 local authority and approved housing body properties. There are approximately 40,000 open correspondence queries on hand with Revenue presently, including postal queries and paper returns. While these queries delay filing, the liable persons are considered compliant. Furthermore, payment arrangements are in place for approximately 262,000 additional properties where returns are not yet filed.
While the return filing deadline passed on 12 November, property owners are still making their best effort to file their returns as these continue to be received by Revenue. The due date for payment of the 2026 LPT for those property owners who do not yet have a payment option in place is 9 January 2026. While detailed analysis of the returns filed will take some time, Revenue publishes preliminary statistics on LPT on a regular basis on its website.
I am further advised by Revenue that based on data published on 18 September it is estimated that 4% of properties will move up one band under the 2026-2030 LPT structure. An increase in LPT base charges for properties valued up to €525,000 is estimated at between €5 and €25 extra annually for most property owners. Table 6 of the LPT technical paper provides the estimated average increase in LPT liability by local authority and band. The LPT technical paper is available on the statistics section of Revenue’s website. A detailed report will be available once a comprehensive analysis of the returns filed for the valuation period is completed.
I am advised by officials and by Revenue that we are a little bit ahead on the filings than we were the last time there was an evaluation period. The evaluations are coming in and the answer is that about 4% of properties will move up one band, and an increase in LPT-based charges for properties valued up to €525,000 is estimated at between €5 and €25 extra annually for most property owners.
The information the Minister is giving me is outdated, obviously. As he mentioned, it goes back to September. Since then the letters have gone out, the evaluations have been done and the returns have been filed. I assume going from his answer that he does not have information as to what percentage of people actually went up a band. I raise this issue because the Government introduced legislation that increased the band valuation by 20%, but when that legislatoin was introduced, house prices had already gone up 29%. In counties such as Donegal, Cavan, Leitrim, Monaghan and Sligo, they had already gone up 40%. All of those property owners are going to be hammered as a result of what the Government has done. Many houses are going to be moving up a band as a result of that. There is an issue if, for example, property owners go from the lower band up to the next band and they are being asked to pay an extra €140. Is the Minister telling me that he has no new information despite the fact that 1.4 million people have actually filed the returns? Is he saying he cannot tell me today what percentage has moved up a band or not?
I am genuinely sharing with the Deputy and I am happy to see if I can get him even more up-to-date information. I had a discussion on this earlier today as well. I am advised by Revenue that it is estimated that around 4% of properties will move up one band. These are the latest data I have available here, but I will try and get more up-to-date for the Deputy as soon as that is available. Let me try to provide him with that. This is genuinely the up-to-date information I have. Around 2.1 million properties are in scope and circa 1.9 million are now in compliance in terms of filing. I will see if there are more up-to-date figures available from Revenue and pass them on directly to the Deputy.
Does the Minister accept that the legislation that underpins the revaluation increased the bands by 20% and that official statistics in counties such as Donegal, Leitrim, Monaghan, Sligo and Galway also had house prices increasing by 40%? The Minister referenced Revenue date published back in September. It estimated that 15% of all households in Galway would actually increase a band. There will be major differentiation across regions. Everybody is paying higher local property tax under Fianna Fáil and Fine Gael. Every single person is paying more. Everybody's property tax increased as a result of this but some had their tax substantially increased. At a time developers are being given hundreds of millions of euro in tax breaks by the Minister's party, people out there are being hit again and again as a result of this revaluation.
We have different views on property tax. Although I am open to correction, I think the Deputy used the property tax figures in Sinn Féin's alternative budget figures-----
We were phasing it out.
That is okay, but we are not. We are committed to the local property tax as a sustainable way of trying to fund local services. We have a situation where more is now being returned to local authorities. Council chambers across the country, including the Deputy's own councillors, engaging in discussions about what to do with that revenue base that the local authorities now have. We have also increased the level of discretion that they have, which is quite important. If we give local authorities a revenue base, allowing our local councillors to determine what best to do and to have a greater level of variance, is a good thing to do. To reflect on some of the points the Deputy made, in some parts of the country there can be particular local reasons, particular anomalies or particular needs that councillors may wish to be able to reflect on as well. This is an example of a tax that has bedded in pretty well and most people in this country accept that it is an important part of funding our local services.
Anois, bogfaidh muid ar aghaidh chuig Ceist Uimh. 4 in ainm an Teachta Roderic O’Gorman. Tá an Teachta Boyd-Barrett á glacadh.
4. Deputy Roderic O'Gorman asked the Tánaiste and Minister for Finance the amount of revenue generated from the rezoned land tax in 2024 and in 2025; the number of landowners who sought exemptions from the tax; the number that were granted; the percentage of the overall land covered by the tax that was granted an exemption; and if he will make a statement on the matter. [64997/25]
The residential zoned land tax, RZLT, was introduced with the intention of trying to deal with land hoarding and to activate land that could be used to build housing. The first liability date was 1 February this year and payments were due in by May of this year. How much revenue has been generated? How many landowners who sought exemptions from the tax? How many were granted? What percentage of the overall land covered by the tax was granted an exemption? We want to see how effective this is.
Residential zoned land tax is a self-assessed annual tax that is calculated at 3% of the market value of land within its scope. It is charged on 1 February each year beginning, as the Deputy said, in 2025 and it applies to land that is zoned for residential use and is serviced and identified on maps published by local authorities, but which is not residential property. The RZLT aims to prompt residential development by incentivising landowners to activate existing planning permissions, or to engage with planning authorities to seek planning permission in respect of relevant land. Revenue has advised that as of 14 November the receipts from RZLT were circa €46 million. There were no receipts in 2024 as the tax was first charged on 1 February 2025.
Information in respect of the amount of RZLT declared, the number of exemptions claimed, and the total hectares returned, including and excluding exempt land, is published within the October 2025 property taxes report available on the Revenue website: www.revenue.ie/en/corporate/information-about-revenue/statistics/property-taxes/yearly-stats/2025/index.aspx.
It shows that as of 30 September 2025, there had been 2,433 registrations for RZLT and 2,002 RZLT returns filed.
Of those returns filed, 160 applicants claimed the exemption and 585 requested a deferral. The most common reason to claim an exemption is to request a rezoning of land, which is allowed for in the legislation, to reflect ongoing economic use. Updated data from relevant local authorities identified 131 submissions which stated that the land subject to the rezoning request was the subject of ongoing economic use. A variation process which recommends rezoning is proposed in 49 of these submissions.
In the context of amount of land involved, in total 3,597 ha were declared, with 3,283 ha liable for the tax. In other words, 314 ha were exempt. The latter comprises 8.7% of all declared land. The Deputy can rest assured that the continuing effectiveness of the measure in terms of achieving its objective will be kept under review.
Eight per cent was deemed exempt. Am I right in saying that a significantly higher proportion has been deferred?
That is correct. Some 160 claimed exemptions and 585 requested deferrals.
Which means that about a quarter got referrals. That is a significant rate of deferral. Will the Tánaiste indicate the reasons for those deferrals? Will he provide any information he has on them? Obviously, the whole point of this is to activate land in order to deliver housing and deal with the scourge of land banking and speculation. As we know, both are widespread. If one quarter of those involved received deferrals, we need to know why they got them and whether they were justified.
The deferrals relate to people seeking to change the use of land. However, I will get the specific note from Revenue in relation to that for the Deputy. The tax is working reasonably well. The other questioner here, Deputy O'Gorman would have pushed for this and was an active supporter of it within the previous Government. We brought it in, and we are seeing some encouraging signs. The Deputy may have seen that the CSO published a report last week which shows that the number of transactions involving residential zoned land in 2024 was significantly up on that for 2023. We are seeing, both anecdotally and in CSO data, a bigger churn of residential zoned land transactions, which is really what we want. If a someone has land and is not going to use it for residential property, they need to pay the tax, seek a rezoning or a change to alternative use or sell it off to somebody who will use it. There is some encouraging data in relation to that. I will try to get more information for the Deputy on the reasons for the deferrals.
As I reflect on the figures, I can see that the main purpose is to activate land and to deal with land hoarding. If three quarters of the people involved paid the tax, that means they are not acting on it. They are willing to pay the tax. We have said from the outset that we thought 3% was too low because the appreciation in the value of land that people are sitting on is probably significantly in excess of 3% at the moment. It can still pay for land speculators and hoarders to just sit on land. They pay the tax - which, it would seem, they are doing - but they are still making money off the land because its value is going up. This suggests that we need much more aggressive measures in order to deal with land hoarding by people who are trying to profiteer from the housing crisis.
In my new role, I am learning not to muse on tax changes outside of a budgetary process other than to say that we continue to keep the effectiveness of the tax under review. We will continue to review it in advance of forthcoming budgets. Our view is that we have a tax in place in relation to taxing residential zoned land where there is not residential property on it. We have put a system in place. This was important. A farmer using land for ongoing economic activity was never what any of us was trying to address. There were teething issues, if I can put it like that, in that regard. Providing a mechanism for people who want to use land for an ongoing economic use is something we are all fine with; it is appropriate. That is working its way through the system as well. As the Deputy stated, this is the first year of it. We are seeing revenue from it of about €46 million. However, as with the earlier question, the aim is to see changed behaviour and people not land hoarding during a housing emergency. We continue to keep the effectiveness of it under review.
6. Deputy Shay Brennan asked the Tánaiste and Minister for Finance if he plans to change the rates of capital acquisitions tax or the thresholds at which the rates are paid; and if he will make a statement on the matter. [65024/25]
This is my first Dáil engagement with the Tánaiste in his position as Minister of Finance. I take this opportunity to wish him all the best in that role. I look forward to working with him in his capacity as Minister into the future.
What, if any, plans does the Tánaiste have in place to examine either the rates of capital acquisition tax or the relief thresholds for gifting or inheriting?
I thank Deputy Brennan for his kind words. I look forward to working with him as well.
Capital acquisitions tax, CAT, applies to both gifts and inheritance and is charged at a rate of 33%. For CAT purposes, the relationship between the person giving a gift or inheritance and the person who perceives it determines the maximum amount, known as the group threshold, below which the CAT does not arise. The group thresholds were most recently increased in budget 2025.
The group A threshold increased to €400,000 from €335,000. This threshold applies where the beneficiary is a child of the disponer. This includes adopted children, stepchildren and some foster children. Parents may also fall within this threshold where they take an inheritance from a child.
The group B threshold was increased to €40,000 from €32,500 in budget 2025. This threshold applies where the beneficiary is a brother, sister, niece, nephew or lineal ancestor or lineal descendant of the disponer. Following recent changes made to CAT legislation, the group B threshold also now applies to persons who receive gifts and inheritance from the wider family of their foster parents, for example from their foster siblings, uncles, aunts and grandparents.
The group C threshold increased to €20,000 from €16,250 in budget 2025. This threshold applies in all other cases.
Along with tax free group thresholds, various reliefs and exemptions are available in relation to CAT, including agriculture and business relief. There is also the small gift exemption, favourite niece or nephew relief and the dwelling house exemption. In general, the availability of specific reliefs in respect of a particular tax head often require a higher rate in order to generate appropriate yields. From a tax policy perspective, it is important to maintain stability and certainty and to ensure that the rate and thresholds in the context of the range of reliefs available.
In truth, there is a significant associated cost with reducing the rate of CAT or increasing the associated thresholds. I recognise the burden of capital taxation. Further changes to the CAT rate and thresholds must therefore be considered among the various demands within the overall budget package, as they have been in the past. We will keep this under review in forthcoming budgets.
Inflation has risen sharply in recent years. Nowhere is this more evident than in urban areas, particularly in Dublin. The median house price in the capital now stands well above the €400,000 group A CAT threshold, yet there has been no recent adjustment to this threshold to reflect this mismatch between asset value and tax policy. This discrepancy often results in a difficult outcome where an individual inheriting a family home from a parent suddenly faces a significant tax liability. This often forces people to either remortgage a property or liquidate it in order to discharge that debt. Has the Department conducted any detailed modelling on the cost to the Exchequer of increasing the group A threshold? Has any serious consideration been given to linking future thresholds dynamically to the official house price index for greater fairness?
I am conscious of the area of the country the Deputy represents and the area of the country that I represent. I am also conscious that property prices, inflation, capital tax, etc., can place a real burden on people, particularly in circumstances where they inherit, for example, family homes. These are real issues that come across our desks and into our lives as we interact with people we represent. We will continue to keep them under review. We have to keep them under review in the context of all of the other pressures and the various tax packages that we bring forward.
In the final budget of the previous Government, in which the Deputy's party and mine were both involved, we made adjustments to the thresholds. We made those adjustments effective in the context of gifts and inheritance taken on or after 2 October 2024. We will continue to keep this under review in forthcoming budgets.
Each year, we produce tax strategy papers. We have a tax strategy group. Perhaps, in light of some of the suggestions the Deputy has made, this is something I will ask our tax strategy group to consider in advance of future budgets.
Individuals who are childless, by choice or otherwise, now make up nearly one in five adults but are effectively penalised under the current capital acquisitions tax regime. Without children to access the larger group A threshold, they are relegated to the much lower group B limit of €40,000 applicable for siblings, nieces and nephews, or even just the €20,000 under group C for all other cases. This means a third of the substantial value of an inheritance, which is often a family home, is paid out in tax liability. The Minister will appreciate this creates a profound unfairness for the 18% of people who are childless when it comes to inheritance. Will the Minister commit to keeping those reliant on group B and group C thresholds under active consideration when devising any changes to inheritance tax policy in next year's budget?
I will, because without pre-empting any future budgets, the last time we did this in budget 2025 we decided to move each of the bands and that was appropriate. We need to look at this in the round. There are always competing demands on what you can do in relation to a tax package each year but we have only delivered one budget out of five. We have four more and if we continue to keep the economy in good stead, continue to run budget surpluses and continue to be able to set money aside in future funds I believe in the medium-term fiscal framework the Minister, Deputy Chambers, and I will bring to Government soon we will be able to see a regular-sized rhythm of tax packages in future and all these issues can be considered in the context of that. With some of the specific policy elements Deputy Brennan has referenced, it would be useful to have the tax strategy group look at this in advance of future budgets. I will continue to link with him on it.
