Tax perk on city homes cost us €51,000
Ministers could claim for residences in capital
Published 27/03/2011 | 05:00
ELEVEN former government ministers claimed €50,963 in tax breaks for keeping second homes in Dublin.
The perk enabled ministers who lived outside the capital to cut their tax bills by an average of €4,545. Some ministers would have got the money in a cash refund at the end of the tax year.
The tax break was designed exclusively for rural government ministers to compensate them for having to stay in the capital on government business. The ministers were entitled to claim tax relief on second homes in the capital, or on hotels or rented apartments, if they didn't have a second property.
The Revenue revealed that in 2009, 11 ministers claimed €27,231 in tax breaks on second homes and €2,838 on rented accommodation, while the amount of relief claimed on hotels was €20,894.
The names of the government ministers who benefitted from the second home tax break remains a State secret. The Revenue refuses to disclose details of an individual's tax affairs.
The reliefs were claimed by the previous Fianna Fail regime with former Taoiseach, Brian Cowen, his deputy, Mary Coughlan, and former Enterprise Minister Batt O'Keeffe, and current Fianna Fail leader, Micheal Martin among the rural deputies who would have qualified for the scheme.
The so-called dual abode allowance has lost the Exchequer more than €550,000 over seven years, but escaped the government scalpel in the round of cuts to political expenses last year.
While the figures may be a drop in the ocean compared to the €90bn-plus national debt, it has come to symbolise the generous expenses entitlements that characterised boom-time politics.
The reliefs reduce the cost of investment for government ministers, giving them a distinct advantage over other amateur speculators.
They also take the sting out of the €200 annual second home tax that all citizens with more than with two properties are obliged to pay.
Rural ministers who own a second home in Dublin are allowed to claim up to 100 per cent mortgage relief. If they bought the property while in office they are allowed to claim back expenses such as auctioneer's fees and even stamp duty, greatly reducing the cost of their property investment. They are also entitled to claim reliefs on rented accommodation and on the cost of hotels and guest houses.
Few outside the Dail were aware of the dual abode allowance until it first came to prominence several years ago, when it aroused public anger. The previous cabal of ministers defended the tax break claiming that the amounts involved are "small".
In 2008, Mr Cowen admitted that he claimed the dual abode allowance for his apartment in Inchicore.
A year later, Micheal Martin, the former Foreign Affairs minister, described the €3,000 he claimed in tax relief for his Dublin home as "not huge".
Mary Coughlan described the perk as "small".
The number of ministers and junior ministers who claimed the dual abode allowance has dropped since the controversial scheme first came to public attention in recent years.
The Commission on Taxation recommended that ministerial tax reliefs for a second home should be capped while the allowance for accommodation should be scrapped.