Finance (Local Property Tax) Bill 2012: Committee Stage

20th December 2012

I move amendment No. 3:

In page 9, between lines 23 and 24, to insert the following:

” “Act of 2003″ means the Capital Acquisitions Tax Consolidation Act 2003;”.

I referred to this on Second Stage and I do not want to take up too much time today. The Minister stated that in principle the properties that I have raised in these categories, those held by trusts for children and youth activities, would be exempt in a similar manner to that of the household charge. I would prefer to hear from the Minister first.

Deputy Michael Noonan: Senator van Turnhout seeks an exemption for residential properties owned by discretionary trusts and charities.

The Thornhill group expressed concern that the exemption provided for in the household charge legislation for discretionary trusts was a potential vehicle for tax avoidance. It considered that it would be relatively easy for a property owner to place the ownership of properties into a discretionary trust and for the trustees to rent the house back to the person setting up the trust or to a family member for a nominal or no rent.

As regards Senator van Turnhout’s amendment of an exemption for charitable bodies, the Thornhill group considered that the local property tax should be centred on principles of equity, transparency and simplicity. Accordingly, I consider that a universal liability should apply to all owners of residential property with a limited number of exemptions. In an effort to keep the rate of tax low and to ensure equity between taxpayers, the Government decided to minimise the number of exemptions to the tax and to limit deferral arrangements to cases where there is a real and material inability to pay the tax.

There will not be a blanket exemption for charitable bodies and in this context, the recommendation to provide an exemption for local authority or social housing providers was limited to special need cases. In practice, the majority of housing provided by registered charities would be expected to be exempt from the tax as it is provided to those who require special accommodation and support to enable them to live in the community. Revenue will be providing guidelines in this regard.

I understand that Senator van Turnhout’s interest is related to her association with the Irish Girl Guides, which organisation owns some properties which are used for breaks and holidays for members. I appreciate that groups such as the girl guides and many other organisations in the community and voluntary sector provide facilities and work with young people and with other sectors for social and personal development purposes. Such organisations were granted exemption from the household charge for the buildings in question and I am disposed to ensuring that the exemption would continue. The matter will be examined and will be dealt with in the finance Bill.

I will not accept the amendment as currently cast because I will not give a blanket exemption to discretionary trusts. However, I will examine the possibility of extending an exemption to bodies such as the girl guides in the context of the finance Bill.

An Leas-Chathaoirleach: That should be music to Senator van Turnhout’s ears.

Senator Jillian van Turnhout: I appreciate the Minister’s answer and I will await the finance Bill.

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