Finance Bill - Other property measures

Oct 23, 2017

Mortgage Interest relief, the disallowance of pre-letting expenses, and the CGT 7 year exemption rule also feature in Finance Bill 2017.

Mortgage interest relief

The legislative basis for measures announced on Budget day to extend mortgage interest relief to the end of 2020 on a tapered basis were included in the Bill. This means that the relief for 2018, 2019 and 2020 will be 75 percent, 50 percent and 25 percent respectively of the existing relief available in 2017.

Pre-letting expenses

A new section 97A has been inserted into the TCA 1997 to legislate for the availability of a deduction against rental income of expenses which are revenue in nature and were incurred in respect of a residential premises which has been vacant for at least 12 months prior to the property first being let. The premises must be let between the date of the passing of the Finance Act and 31 December 2021.

CGT – 7 year exemption

As announced on Budget day, the seven year CGT relief is amended to allow the owners of qualifying land or buildings to sell those assets between the fourth and seventh anniversaries of their acquisition and still enjoy a full relief from CGT on any chargeable gains as per section 604A TCA 1997.  This will apply to sales from 1 January 2018.  It appears that the relief as it originally applies will continue to apply to a disposal after the seventh anniversary of the acquisition date.

Vacant site levy

In an attempt to discourage the hoarding of development land, proposed changes to the vacant site levy were announced on Budget Day which will increase from the current 3 percent levy rate that applies in the first year the site is vacant to 7 percent in the second and subsequent years. To give effect to the proposed changes, legislative amendments to the Urban Regeneration and Housing Act 2015 will be needed. Therefore these amendments are not included in the Bill and are expected to be included in a Local Government Act.

Help to Buy scheme

The Bill does not contain any changes to the Help to Buy scheme.