UP TO €1.9 billion may have been lost to the exchequer between 2004 and 2009 through various property-related tax breaks, according to data compiled by the Revenue Commissioners for the Department of Finance.
Yesterday, the departmentissued a consultation paper on the impact of legacy property reliefs. While the public consultation process is designed to garner input from members of the public on the impact of the controversial tax changes announced in the last budget, the Government still intends to push ahead with the measures in some form.
In December, former minister for finance Brian Lenihan announced changes to property-related tax reliefs for non-owner occupiers. The proposal that section 23 tax relief would be ring-fenced for use against rental income from the property that gives rise to that relief, as opposed to all Irish rental income, as was previously the case, proved particularly controversial.
Following intense lobbying by investor and property-owner representative groups, the then government announced it was to delay the changes until at least 2012 when an assessment of the potential economic impact was to be completed. The new Government is broadly committed to implementing the changes.
The programme for government states that the government will “reduce, cap or abolish property tax reliefs and other tax shelters which benefit very high income earners”.
The publication of the consultation document is “the first stage in that process”, the department said.
Minister for Social Protection Joan Burton was particularly critical of the last government’s decision to delay the implementation of the measures, accusing Mr Lenihan in the Dáil last January of “kicking the can down the road” for another year.
The Department of Finance refused to be drawn yesterday on how the plan could be reformulated.
Preliminary analysis by the department, based on data provided by the Revenue Commissioners and published yesterday, found that close to 60,000 claims were made between 2004 and 2009. A total of 45 per cent of all claims came from tax units with incomes of less than €100,000.
While there are 25 property-related tax schemes in total, most of these are now closed, although most have substantial “legacy” costs which are estimated to cost the State up to €400 million each year.
