Written Answers Nos. 57-76
57. Deputy David Stanton asked the Minister for Finance to outline the engagement that the Revenue Commissioners has with the Department of Housing, Local Government and Heritage, to identify vacant properties that may be liable for the vacant homes tax; and if he will make a statement on the matter. [45475/24]
View answerVacant Homes Tax (VHT) is administered by Revenue in accordance with Part 22B of the Taxes Consolidation Act 1997 (TCA 1997). A residential property will be within the scope of the tax if it has been occupied as a dwelling for less than 30 days in a chargeable period. Each chargeable period commences on 1 November and ends on 31 October of the following year.
VHT operates on a self-assessment basis, where the number of properties in scope and the amount of tax payable depends on the self-assessed returns submitted by property owners, the number of properties declared as liable, and the number of property owners entitled to claim available exemptions from the tax. The first chargeable period commenced on 1 November 2022 and ended on 31 October 2023. The first self-assessed returns were due on 7 November 2023 and the associated tax payable on or before 1 January 2024. The second chargeable period commenced on 1 November 2023 and ended on 31 October 2024, with self-assessed returns due on 7 November 2024 and the associated tax payable on or before 1 January 2025.
VHT does not apply to derelict or uninhabitable properties. Where a property is uninhabitable, to such an extent that it is not suitable for occupation, it is outside the scope of VHT. In such circumstances, the property owner is not required to file a VHT Return. To assist property owners in understanding their obligations in respect of VHT, Revenue has published comprehensive guidance on its website and as a Tax and Duty Manual. These can be found at the following links.
Website: www.revenue.ie/en/property/vacant-homes-tax/index.aspx.
Tax and Duty Manual Part 22B-01-0: www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-22b/22b-01-01.pdf.
I am advised by Revenue that it has undertaken significant work using various sources to understand the number of properties that are likely to come within the scope of the tax. To date, Revenue has written to approximately 25,000 single property owners and 728 multi-property owners requesting the property owners to log onto the portal to confirm whether the properties are occupied or vacant and if applicable, to submit a return. Revenue may contact further property owners, following data analysis. Property owners are required to submit a return if they determine that VHT applies to their property, even if they do not receive correspondence from Revenue.
The relevant legislation allows Revenue to request information from certain person or institutions which include State bodies, utility companies and local authorities. For example, Revenue may ask a local authority for assistance in identifying vacant properties in that local authority’s functional area (i.e. properties that may be subject to the tax). To assist them in identifying properties, Revenue can provide the Local Authority with any information they might need to comply with Revenue’s request.
My Department maintains regular contact with the Department of Housing, Local Government and Heritage in respect of policy on vacancy and dereliction. Revenue further advise that they are engaging with the Building Stories project (formerly Vacancy Map Ireland project) which has been commissioned by the Heritage Council, a body under the aegis of the Department of Housing, Local Government and Heritage.
58. Deputy Duncan Smith asked the Minister for Finance his views on the increase in the sale of diesel-powered cars; the fiscal and tax policies he intends to pursue to reduce the number of diesel-powered cars on the road; and if he will make a statement on the matter. [45505/24]
View answerThe existing vehicle tax structures in the State have a very strong environmental rationale, with the more pollutant, fossil-fuelled cars paying higher rates of tax, between Motor Tax, Benefit-in-Kind (BIK), Vehicle Registration Tax (VRT) and the Nitrogen Oxide (NOx) charge. In contrast, lower emission cars are subject to lower rates of tax. The current policy approach to carbon tax which involves a trajectory of multi annual rate increases also provides a clear signal of the Government's commitment reducing emissions and to fostering uptake of cleaner fuels and technology in road transport as well as other sectors.
VRT on category A vehicles (generally passenger cars) is assessed based on the value of the vehicle and its emissions levels for carbon dioxide (CO2) and NOx. The CO2 component of the VRT charge is a percentage of the vehicle’s Open Market Selling Price (OMSP), ranging from 7% for a vehicle with zero CO2 emissions, up to 41% of the OMSP for vehicles with the highest emission levels. The NOx component of VRT is calculated using a progressive scale, starting from €5 up to €25 per mg/km of the vehicle’s NOx emissions level. As a result, the total VRT charge increases according to the emissions output of the vehicle involved and its market value.
For vehicles registered on or after 1 July 2008, the motor tax rate is based on the CO2 emissions levels of the vehicle, as provided on the Certificate of Conformity. The current motor tax regime incentivises lower emission cars, with rates as low as €120 for electric vehicles (EVs) and as high as €2,400 for the highest emission internal combustion engine cars.
Since 1 January 2023, new rates of BIK have applied to the provision of an employer provided car, which take into account the CO2 emissions of the car. The amount taxable as a BIK remains determined by the car's original market value (OMV) and the annual business kilometres driven, with CO2 emissions bands used to determine whether a standard, discounted, or surcharged rate applies. The new structure is designed to incentivise employers to provide employees with low-emission cars. EVs benefit from a preferential rate of BIK, ranging from 9-22.5% depending on business mileage, and fossil-fuel vehicles are subject to higher BIK rates, of up to 37.5% where there is no business mileage.
As part of Budget 2025, I announced a BIK exemption to the provision of an EV charging facility by an employer at a director’s or an employee’s qualifying residence.
The current tax structures disincentivise the use of diesel-powered cars, however there has been a slowdown in EV sales across several international markets. As Ireland is now moving away from the early adopter EV buyer towards the mass market, uncertainty and instability in the market and public perceptions serve to make the move to EV more tentative for this cohort.
Tax incentives such as VRT relief of up to €5,000 for battery electric vehicles (BEVs), preferential rates of BIK and low motor tax rates all aim to incentivise the uptake of zero to low emission vehicles. Officials from my Department continue to monitor developments in the vehicle taxation area and engage with colleagues in the Department of Transport on an ongoing basis in order to support the transition to EVs. New proposals are considered and current vehicle tax policies are kept under review as part of the Tax Strategy Group and Budgetary cycle.
59. Deputy Réada Cronin asked the Minister for Finance if he will reintroduce tax relief on trade union subscriptions; and if he will make a statement on the matter. [45592/24]
View answerTax relief for trade union subscriptions was previously provided for under section 472C of the Taxes Consolidation Act 1997. The relief was introduced in 2001 and abolished from 2011 onward (in line with the National Recovery Plan and with a view to widening the tax base).
A review of the appropriate treatment for tax purposes of trade union subscriptions and professional body fees was carried out by the Department of Finance in 2016 and included in the 2016 report on tax expenditures published on Budget day 2016.
The review may be found at the following link: assets.gov.ie/181475/91f597c2-bd98-41d8-998e-19f14c099eea.pdf.
The review concluded that:
"...analysis of the scheme using the principles laid down by the Department’s Tax Expenditure Guidelines shows that it fails to reach the evaluation threshold to warrant introduction in this manner.
The reinstatement of this tax relief would have no justifiable policy rationale and does not express a defined policy objective. Given that individuals join trade unions largely for the well-known benefits of membership, and the potential value of the relief to an individual would equate to just over €1 per week, this scheme would have little to no incentive effect on the numbers choosing to join. There is no specific market failure that needs to be addressed by such a scheme, and it would consist largely of deadweight."
In 2020, the Department of Finance carried out a further analysis which took stock of where matters stand in relation to the issue of tax relief for trade union subscriptions and set out a number of policy options for consideration. This exercise suggested that, based on certain assumptions about numbers of beneficiaries, the measure could cost at least €36.9 million if reintroduced at the same level of support as existed in 2010. However, it also drew attention to the potentially significant dead weight element which would accompany the measure.
That analysis was published with the 2020 Tax Strategy Group papers at: assets.gov.ie/86995/006fad3c-ebb5-4b0e-b067-92f8102d6e43.pdf.
In relation to the question of the potential reintroduction of tax relief for trade union fees, any such decision must have regard to the sound management of the public finances and my Department's Tax Expenditure Guidelines. As the Deputy will appreciate, I must 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.
60. Deputy Réada Cronin asked the Minister for Finance if he will exempt payments made to farmers under the Climate Action Performance Payment from the Universal Social Charge and PRSI; and if he will make a statement on the matter. [45594/24]
View answerThe Climate Action Performance Payment Scheme is part of the Ash Dieback Action Plan for forest owners impacted by ash dieback disease, published by the Department of Agriculture, Food and the Marine (DAFM).
Payments under the scheme, totalling €5,000 per hectare, may be paid by DAFM in three instalments to grant aided ash forest owners (including forest owners who are farmers) who clear ash from their forests and replant with an alternative species through one of the Ash Dieback Reconstitution Schemes.
Section 232(2) of the Taxes Consolidation Act 1997 (TCA) provides that profits or gains from the occupation of woodlands in the State:
• which are managed on a commercial basis, and
• with a view to the realisation of profits,
are exempt from income tax and corporation tax.
I am advised by Revenue that payments received under the scheme should be included as income in the calculation of a person’s profit or loss. Any profit or gain arising will be exempt from income tax or corporation tax.
When completing their Income Tax Return, an individual must claim the exemption by completing the ‘Exempt Income’ section of the return, including details of any profit or gain under ‘Profit or gains from Woodlands’. The exemption does not apply to the Universal Social Charge and Pay Related Social Insurance; I have no plans to change to how section 232 of the TCA works in this regard.
61. Deputy Réada Cronin asked the Minister for Finance if he will increase the tax exemption limits for people aged 65 years and over, taking into account the recent increases to the State pension and many having to pay increased tax due to this; and if he will make a statement on the matter. [45595/24]
View answerThe income tax age exemption applies for any year of assessment where an individual is aged 65 years or over and his or her total income does not exceed €18,000 per annum. Where an individual is a married person or civil partner and is jointly assessed to tax, the age exemption will apply where either individual is aged 65 or over and where the couple’s total income does not exceed €36,000 per annum. The relevant income thresholds may be increased further if the individual has a qualifying child. The thresholds are increased by €575 in respect of both the first and second child, and €830 in respect of each subsequent child.
Additionally, marginal relief may be available where the individual’s or couple’s income exceeds the relevant exemption limit but is less than twice that amount. Where marginal relief applies the individual or couple is taxed at 40 per cent on all income above the exemption limit to a ceiling of twice the exemption limit. The system of marginal relief ensures that in cases where an individual's or couple’s income rises above the exemption threshold that their net income will not decline, as the 40 per cent income tax rate only applies to the proportion of income above the threshold.
It should be noted that once the income exceeds twice the exemption limit, marginal relief is no longer available and the individual pays tax under the normal tax system. However, where the individual’s or couple’s income is greater than the exemption limit but below twice that limit, the taxpayer is entitled to the benefit of the more favourable treatment between the use of marginal relief or the normal tax system of credits and bands.
In circumstances where an individual or couple no longer benefits from the age exemption or marginal relief they will benefit from the increases to the main personal tax credits in recent Budgets.
The increases to the main personal tax credits in Budget 2025 (€125 increase to the single, employee and earned income credits and a €250 increase to the credit for married couples/civil partnerships) means that the effective entry point to income tax has increased for all taxpayers, including those aged 65 or older. From 2025, the effective entry point to income tax for an individual in receipt of the single person credit, employee/earned income credit and the age credit will increase by €1,250 per annum from €19,975 to €21,225 per annum. This means that married couples or civil partners can potentially earn up to €42,450 per annum before they pay income tax in 2025, depending on their particular circumstances.
In addition, it is important to take into account that the current tax arrangements for persons aged 65 or older compare favourably with the tax treatment of the generality of taxpayers. Persons aged 65 or over may also avail of the age tax credit, which currently amounts to €245 per year for single persons or €490 per year for married couples or civil partners. Reduced rates of USC also apply for persons aged 70 or older where their total income is €60,000 or less per annum. Social welfare income such as the State Contributory Pension and State Non-Contributory Pension are excluded from the calculation when determining if an individual’s income has exceeded the €60,000 income threshold. Furthermore, the State Contributory Pension and the State Non-Contributory Pension are not chargeable to USC or Pay Related Social Insurance.
It should be noted that the Commission on Taxation and Welfare recommended that age should be removed as a factor for determining the charge to income tax and USC. The report stated that the determination of an individual’s tax treatment based on age narrows the base and breaches the concept of horizontal equity, whereby those with similar income should pay the same proportion of that income in taxes. It also breaches the concept of intergenerational equity. Further details are set out in the Report of the Commission, at the following link - www.gov.ie/en/publication/7fbeb-report-of-the-commission/.
Finally, as part of the Personal Tax Review published on last year’s Budget Day, my Department set out further analysis of the recommendations of the Commission on Taxation and Welfare, including in respect of the age exemption limits. The Report is available at the following link – www.gov.ie/pdf/?file=https://assets.gov.ie/273335/96f70eb1-64e1-4f02-9096-e36f306a048b.pdf#page=null.
62. Deputy Robert Troy asked the Minister for Finance if an existing property, which is derelict can qualify for the help-to-buy scheme. [45607/24]
View answerHelp to Buy (HTB) is a scheme to assist first-time purchasers with the deposit they need to buy or build a new house or apartment. The incentive offers a refund on Income Tax and Deposit Interest Retention Tax (DIRT) paid in the State over the previous four years, subject to limits outlined in Section 477C of the Taxes Consolidation Act 1997.
For a property to qualify for HTB, it must be new or converted for use as a dwelling, having not been previously been used as a dwelling. In the circumstances where the house was previously used as a dwelling but knocked down and rebuilt, then it is considered “new”. First-time buyers under HTB may purchase a site containing a house which is derelict and which they plan to demolish, in whole or in part, with the intention of building a new house.
First time buyers intending to undertake such purchases should contact Revenue via MyEnquiries outlining the specific circumstances of their case and Revenue will consider eligibility for HTB on a case by case basis.
63. Deputy Robert Troy asked the Minister for Finance if there are plans to increase the help-to-buy scheme and assist first-time buyers further with the cost of deposits. [45608/24]
View answerFinance Bill 2024 extends Help to Buy scheme in its current form for a further four years to 31 December 2029. This approach, gives further certainty to future homebuyers and to the market.
I have no further plans in relation to the Help to Buy scheme at present.
64. Deputy Sorca Clarke asked the Minister for Finance the number of vacant WTE posts, by job title, currently at the Financial Service and Pensions Ombudsman; and the estimated timeframe in which each of the vacancies will be filled, in tabular form. [45653/24]
View answerThe Financial Services and Pensions Ombudsman (FSPO) is an important part of the robust consumer protection framework in place in Ireland to support consumers of financial products and services.
It is an independent and impartial statutory body that helps to resolve complaints from consumers, including small businesses and other organisations, about the conduct of regulated financial service providers and pension providers.
In December 2023, the Minister for Finance sanctioned a significant increase in additional staff for the FSPO under its Workforce Plan 2024-2026. This increased the sanctioned staff complement from 90.2 to 128, a 42% increase in FSPO staffing.
The implementation of this Workforce Plan will increase the FSPO’s resources and the capacity of the organisation to resolve cases promptly. The FSPO has been actively recruiting and training these additional staff throughout the year.
To date in 2024, 41 appointments have been made. Some of these appointments were promotions of existing staff resulting in new vacancies to be filled. The outstanding recruitment plan, which includes anticipated on-boarding dates is set out below.
With respect to the vacancies below, two have accepted offers of appointment and onboarding dates and, at 1 December 2024 total anticipated vacancies will be 15.
The FSPO’s staff headcount (FTE) at 4 November 2024 is 111.4.
|
Role Title |
Grade |
Vacancies |
Anticipated Onboarding Date |
|
Clerical Officer |
CO |
3 |
End 2024 |
|
Human Resources Officer |
EO |
1 |
January 2025 |
|
Communications Officer |
EO |
1 |
January 2025 |
|
Higher Executive Officer |
HEO |
2 |
Dec 2024 and March 2025 |
|
Strategy Manager |
HEO |
1 |
Nov 2024 |
|
Decision Drafters |
AP |
6 |
March 2025 |
|
Senior Manager IT |
AP |
1 |
February 2025 |
|
Deputy Ombudsman |
|
2 |
TBC |
|
Totals |
|
17 |
65. Deputy Pearse Doherty asked the Minister for Finance the number of residential units and the number of persons subject to the 10% rate of stamp duty with respect to the acquisition of certain residential property where a person acquires at least ten such units during any 12-month period, in each of the years 2022,2023, and 2024 respectively; and the total value of said stamp duty paid in each of the years 2022, 2023 and 2024, respectively. [45700/24]
View answerThe application of the 10% rate of stamp duty to certain acquisitions of residential property is provided for in section 31E of the Stamp Duties Consolidation Act 1999, as introduced by the Finance (Covid-19 and Miscellaneous Provisions) Act 2021.
I am advised by Revenue that, based on returns filed for the period since the commencement of the Section, the available information in respect of 2022, 2023 and 2024 to date is as shown in the table below. The data in the table are provisional and may change as additional returns are filed or amended.
|
Stamp Duty Section 31E
|
10% Duty payable (€m) |
Number of Purchasers* |
Number of Properties |
|
2022** |
16 |
16 |
440 |
|
2023** |
23.3 |
17 |
649 |
|
2024 to date |
11.2 |
10 |
303 |
*Where an entity purchases multiple properties on multiple stamp duty returns in a year, they are counted once only.
**Updated figures from previous responses to Parliamentary Questions, reflecting additional or amended returns filed.
66. Deputy Pearse Doherty asked the Minister for Finance if he has considered proposals submitted to him by a person (details supplied); if he has considered the implications that these proposals would have for tax payers; if so, the implications; and if he will make a statement on the matter. [45705/24]
View answerIn advance of the Budget and annual Finance Bill, as Minister for Finance I receive a large number of submissions and correspondence on a wide range of issues.
I can confirm that the correspondence to which the Deputy refers was received on 11 October 2024.
The correspondence which covers a number of issues and policy areas has been referred to the relevant officials for consideration. A reply will issue directly to the correspondent as soon as possible.
67. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 232 of 15 October 2024, when he became aware that the Central Bank was or was to become, the ‘home’ country for Israeli bonds within the EU; and if he will make a statement on the matter. [45804/24]
View answer68. Deputy Pearse Doherty asked the Minister for Finance when sanctions could be applied if the Central Bank of Ireland chose to not approve or withdraw approval of the prospectus of Israeli bonds without providing a legal basis; and if he will make a statement on the matter. [45805/24]
View answer69. Deputy Pearse Doherty asked the Minister for Finance if he is aware that the prospectus for Israeli bonds approved by the Central Bank of Ireland which allows the bonds to be sold across Europe does not include information on the fact that these bonds are used to fund to the ongoing genocide in Palestine; and if he will make a statement on the matter. [45806/24]
View answer70. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question No. 232 of 15 October 2024, if he accepts that Israeli bonds are used to fund the ongoing genocide in Palestine; and if he will make a statement on the matter. [45807/24]
View answerI propose to take Questions Nos. 67, 68, 69 and 70 together.
As a matter of course, the Minister for Finance would not be made aware by the Central Bank of Ireland (CBI) of specific regulatory matters where the Minister has no role or function. As the Deputy will be aware, the CBI as the financial regulator is independent in its operations and I have no role or function as regards the application of the EU Prospectus Regulation. I would refer the Deputy to my reply to Parliamentary Question No. 232 October 15 2024 for further detail on this regulatory matter.
With respect to when sanctions could be applied in the event that CBI, in its capacity as the national competent authority for the Prospectus Regulation, decided not to approve or to withdraw approval of a prospectus, it would be a matter for the issuer to appeal such a decision to the Irish Financial Services Appeals Tribunal (IFSAT) or seek a review of the decision through the Irish courts. The IFSAT or the Irish courts as the case may be would then make a determination.
In terms of the information that is required in a prospectus, that is set out in Prospectus Regulation and, in terms of the regulatory function, it is solely a matter for the CBI to assess such information as the competent authority in this State. I have no role or function in relation to this regulatory matter.
71. Deputy Matt Carthy asked the Minister for Finance further to the ruling of the International Court of Justice that Israel’s occupation of Palestine is illegal and that there is a duty upon states to ban trade and investment with settlements, if he will progress the Illegal Israeli Settlements Divestment Bill 2023 to ensure that Ireland does not continue to invest in companies which derive profits from their investment in illegal settlements; and if he will make a statement on the matter. [45851/24]
View answerThe Government’s only formal decision in relation to it to date was to propose a 9-month timed amendment at Dáil Second Stage in May 2023. This was in order to allow for consideration of the issues raised by that Bill including alternative non-legislative based approaches or a combination of legislative and non-legislative based approaches which could achieve a similar outcome.
Following the expiry of the 9-month timed amendment to the Bill on 17 February last Pre-Committee Stage scrutiny has been conducted by the FINPERT committee.
Pre-Committee Stage Scrutiny has been valuable in informing our collective understanding of the policy and legal matters which the Bill raises. The Bill raises legal and policy questions regarding the use of the UN database and free movement of capital as well as wider practical implementation issues.
While FINPERT’s report supports the Bill, it recognises the challenges related to incorporating the UN Database in Irish statute and the importance of an appeal mechanism against divestment.
All of the work done during the period of the timed amendment and Pre-Committee Stage Scrutiny will help inform both mine and the Government’s position on the Bill going forward.
Following a decision in April 2024 ISIF has divested from 5 banks and a supermarket chain in respect of investments in the Occupied Territories.
There is ongoing engagement between the Minister for Finance and the Ceann Comhairle on the money message treatment of the PMB.
72. Deputy Colm Brophy asked the Minister for Finance the estimated cost of reducing the VAT rate from 13.5% to 11% and 9% respectively for food and catering services, as well as all entertainment and hairdressing services; and if he will make a statement on the matter. [45969/24]
View answerI am advised by Revenue that traders are not required to identify the VAT yield generated from the supply of specific goods and services on their VAT returns. Therefore, it is not possible to provide a costing for the measures outlined above using information provided on tax returns alone.
However, using third party data, tentative estimates of the full year cost to the Exchequer of the requested measures is provided below:
|
Sector |
Cost of VAT at 9% |
Cost of VAT at 11% |
|
Food and Catering Services |
€675m |
€375m |
|
Entertainment |
€20m |
€11m |
|
Hairdressing |
€39m |
€21m |
|
Total Cost |
€734m |
€407m |
73. Deputy Colm Brophy asked the Minister for Finance the estimated cost of increasing the research and development tax credit by 5% and 10%; and if he will make a statement on the matter. [45970/24]
View answerThe Research and Development (R&D) corporation tax credit is a strategically important element of Ireland’s overall support for research and development activities. Irish R&D supports form part of a suite of measures that ensures Ireland remains an attractive location for both domestic and inward investment.
Ireland has successfully created a globally competitive innovation hub, and the R&D tax credit has played a large part in that success. Multinational firms in Ireland support thousands of Irish jobs, Irish companies and Irish education institutions. This is particularly encouraging for regional economies, with sectoral clustering evident, leading to significant benefits for local economies, business communities and third level institutions.
As part of Finance Act (No. 2) 2023 the rate of the R&D tax credit was increased from 25% to 30%. This increase in the R&D corporation tax credit rate preserved the net benefit of the credit for companies within the scope of Pillar Two. It also provided an increased support to companies (including micro and small sized companies) not subject to the new minimum tax rules thus encouraging increased engagement with the regime.
This year Finance Bill 2024 will increase the first year payment threshold from €50,000 to €75,000. This threshold is the amount up to which a claim can be paid in full in the first year, rather than paid in instalments over three years. These changes will provide a cash-flow benefit for smaller research & development projects and to encourage more companies to engage with the regime while maintaining the government’s focus on enterprise supports, to support productive and innovative businesses in the state.
I am advised by Revenue that the estimated cost of increasing the research and development tax credit by 5% and 10% is €230 million and €460 million respectively. These figures are based on 2022 data, where the credit was at 25% and there was a large increase in the Exchequer cost that year, which is expected to have arisen in part due to the restructuring of the credit in that year to meet new global standards for refundable tax credits, which resulted in a one-off acceleration of some payments into 2022. The R&D credit is a demand-led support and the annual cost fluctuates over time as a result of company R&D cycles.
74. Deputy Pearse Doherty asked the Minister for Finance further to Parliamentary Question Nos. 88 and 89 of 16 October 2024, if he accepts that estimating the cost of increasing the standard fund threshold using only the available information about previous payments of chargeable excess tax will have underestimated the actual cost of this measure; if his officials provided a higher range scenario based potential behavioural change; if so, if he will provide that higher range scenario; and if he will make a statement on the matter. [45987/24]
View answerAs I set out in my replies to Parliamentary Question Nos. 88 and 89 of 16 October 2024 there is limited data available on which to base any costings in relation to changes to the SFT.
As there is not sufficient data available my officials could not prepare any costing on the basis of behavioural change. As discussed in detail in the report on the Examination of the SFT, considering these costs in isolation without allowing for the tax paid at draw down does not give an accurate indication of pensions tax expenditure costs.
My officials and Revenue will continue to monitor the measure as the changes to the SFT come into effect, including any data that becomes available in relation to costs associated with the increases.
75. Deputy Bernard J. Durkan asked the Minister for Finance whether consideration might be given to a change in the way investment funds interact with consumers with particular reference to those funds who have bought impaired mortgages at a lower than face value rate, but who continue to exert pressure on the borrower for the full face value of the loan including arrears and interest; if consideration might be given to settlement nearest to price they bought the loan for notwithstanding moral hazard; and if he will make a statement on the matter. [46028/24]
View answerThere is a strong consumer protection framework in place in Ireland in relation to the operation of mortgage credit agreements entered into by consumers. All Central Bank regulated mortgage entities, including those entities servicing mortgage agreements or who hold the legal title to the rights of the mortgagor, are required to comply with this framework.
The Central Bank Code of Conduct on Mortgage Arrears 2013 (CCMA) is a key component of this regulatory framework. The CCMA applies where a borrower is in or facing arrears on a mortgage which is secured on a primary residence. Its primary objective is to ensure that regulated entities have fair and transparent processes in place for dealing with such borrowers. Due regard must be given to the fact that each case is unique and needs to be considered on its own merits and all cases must be handled sympathetically and positively by the regulated entity, with the objective at all times of assisting the borrower to meet his or her mortgage obligations.
In order to determine which options for an alternative repayment arrangement (ARA) are viable in a particular situation, each regulated entity must explore all of the ARA options offered by that entity. The CCMA provides that any ARAs offered by a regulated entity should be appropriate and sustainable and be based on a full assessment of the individual circumstances of the borrower. It should also be noted that the CCMA provides that each entity must have an appeals process in relation to a decision under the CCMA, including in circumstances where a regulated entity declines to offer an ARA or where a borrower is not willing to enter into the ARA offered by a regulated entity. Such an appeal must be considered by an Appeals Board that must be comprised of three of the entity’s senior personnel who have not been involved in the borrower’s case previously.
Furthermore, the regulated entity must also inform the borrower of his/her right to refer the matter to the Financial Services and Pensions Ombudsman.
However, the regulatory framework does not proscribe that a particular ARA or credit agreement modification should be provided in a particular situation. That is a matter which will fall for consideration in the context of the individual engagement between the borrower and the regulated entity under the CCMA’s mortgage arrears resolution process, or the consumer protection framework more generally, and I do not have a role in such matters.
Also, in circumstances where the initial lender assigns its benefits and rights under a credit agreement to another entity, the consideration paid for that assignment is a commercial matter for the relevant entities. However, the new entity which acquires the contractual rights and benefits of the creditor will do so based on the terms of the existing loan agreement and the borrower’s obligations and rights under the credit agreement will not change.
As the Deputy will know, there are also a number of public initiatives to assist people who are in mortgage or other debt difficulty. The Abhaile service which is made up of the Insolvency Service of Ireland (ISI), the Legal Aid Board, the Money Advice and Budgeting Service (MABS) and the Citizens Information Board provides free financial advice, and where appropriate also, legal advice to people experiencing difficulty with their mortgage.
This service can also provide advice on the insolvency options which may available to borrowers, including the possibility of a Personal Insolvency Arrangement in relation to an unsustainable secured debt.
I would encourage any person who is experiencing difficulty with their debt situation to contact MABS for advice and assistance.
