Revenue Note for Guidance

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Revenue Note for Guidance

531AAE Property relief surcharge


This section provides for an increase in the Universal Social Charge (USC) in respect of income of certain individuals. It potentially only applies to those whose gross income in the year is at least €100,000, and then only to income, which is sheltered by any of the property or area-based incentive reliefs in that year. This means any of the accelerated property capital allowances under any of the incentive schemes as well as the residential lessor relief commonly known as section 23-type relief. The 5% property relief surcharge is payable, in addition to any other USC, which the person is obliged to pay on the income in question.

Where a person’s gross income is less than €100,000, no additional USC is payable, even if that person is using these property reliefs.


(1) A series of definitions, used in the section are set out:

“aggregate of the specified property reliefs” means the aggregate of the amount of any specified property relief used by the individual in a tax year;

“amount of specified property relief” refers to specified reliefs and means the amount of all such specified property relief used by the individual in a tax year;

“area-based capital allowance” is a reference to all of the accelerated capital allowances provided for under any of the designated area or urban or rural renewal schemes. It also includes all of the older schemes, which have formally ended or have been replaced in more recent times. Finally, these allowances also include allowances given in an earlier period and carried forward into a later one;

“balancing allowance” means any allowance made under section 274. This is a reference to the allowance which may apply upon the sale of a capital asset;

“specified capital allowance” means any specified relief, being a writing down allowance, a balancing allowance or any of the other property-based accelerated capital allowances provided for and includes any unused amount of such allowances carried forward from one chargeable period into a subsequent one in accordance with Part 9;

“specified individual” means an individual whose aggregate income (for USC purposes) for the year is €100,000 or more;

“specified property relief” means–

  1. any area-based capital allowance or any specified capital allowance, or
  2. any eligible expenditure, within the meaning of Chapter 11 of Part 10, to which section 372AP applies. This is a reference to what is commonly known as section 23-type relief and includes such relief as it is carried forward as losses from one year to the next;

“specified relief” means any relief arising under any of the provisions set out in column (2) of Schedule 25B. These are the reliefs to which the high earners restriction applies.

“writing down allowance” means any allowance provided for under section 272 and includes an allowance as increased under section 273. This is the annual allowance, which may be written off against income in respect of a range of industrial buildings or structures and also includes circumstances in which “free depreciation” is or was allowed.

(2) Any reference in the section to a specified property relief being used is to be interpreted as meaning that part of the relief to which full effect has been given. For example, if €100,000 of section 23-type relief is carried forward into a particular tax year and set against rental income of €20,000, then it is that latter amount which has been used.

(3) The property relief surcharge is applied at a rate of 5%. It is calculated on the basis of the amount of the specified individual’s aggregate income (for USC purposes) against which specified property relief has been used in that year. For example, if an individual has aggregate income of €150,000 in the year, that means that individual is a specified individual. If that specified individual uses €50,000 of specified property relief to shelter some of that income from tax, then the property relief surcharge of €2,500 (5% of €50,000) will apply. This charge is in addition to any “normal” USC, which the individual may have to pay.

(4)(a) The provisions of section 485C(3) and Schedule 25C are applied to any amounts carried forward into the tax year 2012 or to any subsequent tax year. This is necessary as it allows the individual to determine how much relief is attributable to individual premises at any point in time. It also enables a segregation between reliefs and other commercial losses or expenses. These provisions are primarily in place for the purposes of the high earners restriction, which was introduced in 2007. In this case, the references to 2006 and 2007 are to be read as 2011 and 2012.

(4)(b) Specified reliefs to be used in any particular tax year are segregated into those which are specified property reliefs and those which are not. For the purposes of this section, those which are specified property reliefs are treated as being used in priority to those which are not specified property reliefs.

(5) If the property relief surcharge is due to be paid by a specified individual in respect of the tax year 2012, then provision must be made for this by the deadline for the payment of preliminary tax (31 October 2012). Without this provision, the normal rules relating to preliminary tax payments would apply and since the surcharge did not exist in 2011, then no payment on account of the property relief surcharge would be due by that date. For the purposes of the payment of the surcharge, this section is treated as having been in place in the tax year 2011.

Relevant Date: Finance Act 2021