171. Deputy Naoise Ó Muirí asked the Tánaiste and Minister for Finance whether the current inheritance tax rules for people inheriting a family home are under review in light of rising house prices. [66106/26]

172. Deputy Naoise Ó Muirí asked the Tánaiste and Minister for Finance whether consideration has been given to introducing measures to account for regional differences in residential property values when assessing capital acquisitions tax liabilities. [66105/26]

173. Deputy Naoise Ó Muirí asked the Tánaiste and Minister for Finance whether an assessment has been undertaken of the potential cost to the Exchequer of reducing the Capital Acquisitions Tax rate from 33% to 20%. [66104/26]

174. Deputy Naoise Ó Muirí asked the Tánaiste and Minister for Finance whether consideration is being given to increasing the category A capital acquisitions tax threshold in line with inflation since 2009. [66103/26]

I propose to take Questions Nos. 171, 172, 173 and 174 together.

Capital Acquisitions Tax (CAT) is a tax which applies to both gifts and inheritances and is charged at a rate of 33%. For CAT purposes, the relationship between the person giving a gift or inheritance and the person who receives it determines the maximum amount, known as the “Group threshold”, below which CAT does not arise. The group thresholds were most recently increased in Budget 2025.

The Group A threshold increased to €400,000 from €335,000. This threshold applies where the beneficiary is a child of the disponer. This includes adopted children, stepchildren and some foster children. Parents may also fall within this threshold where they take an inheritance from a child.

The Group B threshold increased to €40,000 in Budget 2025 from €32,500. This threshold applies where the beneficiary is a brother, sister, niece, nephew, or lineal ancestor or lineal descendant of the disponer. Following recent changes made to Capital Acquisitions Tax legislation, the Group B threshold also applies to persons who receive gifts and inheritances from the wider family of their foster parents, for example, from their foster siblings, uncles, aunts and grandparents.

The Group C threshold increased to €20,000 in Budget 2025 from €16,250, with this threshold applying to all other cases.

There is a significant associated cost with reducing the rate of CAT. Revenue data demonstrates that, by way of example, reducing the rate of CAT by 1% would cost approximately €30.6 million annually. Reducing the CAT rate by 13% to 20%, as outlined in the Deputies question, would therefore be estimated to cost in the region of €397.8m.

The Capital Acquisitions Tax Consolidation Act (CATCA) 2003 provides for a number of exemptions wherein no charge to CAT arises in respect of certain types of gifts and inheritances if certain conditions are met. For example, section 86 CATCA 2003 provides for an exemption from CAT on the inheritance of a dwelling house.

Where a person takes an inheritance of a dwelling house, that person may be able to avail of the dwelling house exemption. To qualify for the exemption, the inherited property must have been the disponer’s principal private residence at the date of death. This requirement is relaxed in situations where the deceased person left the property before the date of death due to ill health; for example, to live in a nursing home. The beneficiary must also have lived in the house for 3 years prior to the date of the inheritance and must continue to live in the house for 6 years after that date. In addition, the beneficiary must not have a beneficial interest in any other residential property. Detailed guidance on the dwelling house exemption has been published on the Revenue website at https://www.revenue.ie/en/gains-gifts-and-inheritance/cat-exemptions/dwelling-house/index.aspx

My officials conducted a review of Capital Acquisitions Tax last year as part of the annual Tax Strategy Group exercise and have done so again in this years Tax Strategy Group papers. The resultant papers outlined the tax policy considerations for the Government and the options available to it in forming last years and this years Budget.

The Tax Strategy group papers are published in advance of the Budget and are the best means of considering issues such as inheritance tax in an analytical and transparent way. The Tax Strategy Group is not a decision making body and the papers produced by my Department are simply a list of options and issues to be considered in the Budgetary process. Following publication of the papers, the department receives correspondence from stakeholders and experts which is considered by officials.

As with all taxation matters, CAT is kept under review. As the Deputy will be aware, it is a long-standing practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.