THIS YEAR’S €14 BILLION Budget has been revealed, with a range of tax cuts, welfare increases and measures aimed at curbing different, ongoing issues affecting Irish society.
The housing crisis, one of the biggest of those issues, was one of the bigger Budget highlights, with separate measures announced for both renters and landlords alike.
But help for landlords in particular – tax relief on their rental income up to €3,000 – attracted criticism from the opposition, with Sinn Féin’s finance spokesperson Pearse Doherty calling it “one of the stupidest tax reliefs ever” provided by a Government.
The Donegal TD also claimed that the overall cost of the relief equated to double what the Government was giving renters in the Budget. But is he right?
Sinn Féin’s finance spokesperson Pearse Doherty claimed that measures for landlords in Budget 2024 are worth around twice what the Government is giving to renters.
In a speech after the Finance and Public Expenditure Ministers delivered next year’s Budget, Doherty referenced both the €250 rise in the tax credit for renters and the tax relief that will be given to landlords in quick succession.
He then claimed that measures for landlords in the Budget would be around double what would be given to renters, saying:
“You simply couldn’t make this up. In this budget, this Government has provided nearly twice as much to landlords as it has to struggling renters.”
Let’s look at how much the Government will give both renters and landlords in next year’s budget.
Finance Minister Michael McGrath’s entire Budget 2024 speech can be read here.
For the second year in a row, the Government announced an increase in the Rent Tax Credit, which reduces the amount of income tax that a renter has to pay in one year.
It is worth 20% of a person’s rent payments for one year up to the maximum value of the credit.
Tax-paying renters can claim the money back from Revenue as long as their landlord is registered with the Residential Tenancies Board (RTB).
It can be claimed on an individual basis, so even those living with housemates or a partner can claim the full amount. Married couples and civil partners can claim together for double the amount.
Once an application for the credit is successfully made to Revenue, the value of the credit will then be added to the applicants overall tax credits for the year.
Claimants have up to four years to apply for the credit.
The credit was introduced last year, when the Government said it would be worth up to €500 in each year from 2022 to 2025.
Yesterday, the Government increased the value of the credit by €250 so that it will be worth up to €750 from 2024 onwards.
The credit has also been extended this year to cover students living in ‘digs’ under the ‘Rent a Room’ scheme.
It is estimated that 400,000 individuals are eligible to apply for the credit in 2023, though not all of these will be worth the maximum amount.
What will this cost the Government overall?
There are two ways of looking at this to answer how much renters have been given in next year’s Budget.
The first is to consider the €250 increase on its own terms, because that was what was announced in Budget 2024 – under this way of thinking, the €500 credit was an old measure that was already locked in.
The Government’s own Budget document has listed it this way, estimating that the increase on its own will cost €88 million in total in 2024.
The other way is to consider the entire €750 credit in its totality – because the government has budgeted for the value of the credit, rather than the increase, next year.
It is clear that the entire €750 credit will cost a lot more than the €88 million which yesterday’s announcement earmarked on its own. McGrath previously estimated that the €500 credit announced last year would cost in the region of €200 million in 2024.
If this cost carried over and was combined with the €88 million value of the increase, the total spend in 2024 would therefore be €288 million (though this is slightly back-of-the-envelope maths).
But what have landlords been given, and how much?
The other rental measure announced yesterday was a temporary tax relief for landlords, which the Government has said is aimed at stemming the flow of smaller landlords from the rental market.
Under the measure, landlords will be entitled to have rental income of up to €3,000 tax-free at the standard rate (20%) in 2024. This will rise to €4,000 in 2025, and again to €5,000 in 2026 and 2027.
In real terms, the measure will equate to a saving of 20% on each amount per year.
In other words, landlords will get tax relief of €600 (ie 20% of €3,000) in 2024. This will rise to €800 in 2025, and €1,000 for 2026 and 2027.
According to Government documents for the Budget, this will cost an estimated €160 million in 2024.
So who is getting more in Budget 2024: landlords or renters? As you can see from the evidence above, the answer depends on the way you look at the figures.
If the €250 increase in the Rent Credit is taken on its own (that is, without considering the €500 credit announced last year which will still form part of the overall credit), the Budget has earmarked €88 million for renters next year.
By comparison, the tax rent relief for landlords is expected to cost the Government €160 million in 2024 – around double the Rent Credit increase for renters.
Going by these figures, Pearse Doherty’s claim is accurate.
But the increase to the Rent Credit on its own doesn’t paint the full picture, because it only accounts for additional spending next year.
What’s actually outlined in the Budget is a €750 tax credit, which will be worth a lot more than the €88 million earmarked for the €250 increase alone.
Comparing everything given to landlords with everything given to renters is arguably a more like-for-like comparison than looking at new measures in this year’s Budget.
As noted above, the Government previously estimated that the €500 credit on its own would cost about €200 million a year (up until 2025).
If this cost carried over, the additional €88 million would therefore bring the total estimated spend on the Rent Credit next year to €288 million - over €120 million more than is being given to landlords in the form of tax relief.
In that case, Doherty’s claim would be very wide of the mark.
Sinn Féin’s Pearse Doherty claimed in the Dáil that the Government would provide landlords with around twice as much as what they would provide renters in Budget 2024.
He criticised the Government for giving money back to landlords next year in the form of a temporary tax relief on income up to €3,000, and compared it to a €250 increase in the Rent Tax Credit for renters.
Figures outlined by the Government in Budget 2024 documents state that the landlords’ tax relief is expected to cost €160 million next year, compared to the increase in the Rent Tax Credit, which is expected to cost €88 million.
Doherty’s claim is therefore correct from that point of view.
However, the €88 million spend on increasing the Rent Tax Credit refers to the value of that increase alone; it doesn’t include the entire value of the Rent Tax Credit – worth €750 a year.
The cost of the Rent Tax Credit will be worth more than that increase on its own. The Minister for Finance said earlier this year, when the Rent Tax Credit was worth €500, that it was expected to cost €200 million next year.
If that amount carried over, the additional €88 million on top of this would therefore bring the total earmarked for renters in 2024 to €288 million (although it should be clarified that we don’t know that this is the figure).
Therefore, we rate the claim as MIXTURE.
As per our verdict guide, this means that there are elements of truth in the claim, but also elements of falsehood; or the best available evidence is evenly weighted in support of, and against, the claim.
The Journal’s FactCheck is a signatory to the International Fact-Checking Network’s Code of Principles. You can read it here. For information on how FactCheck works, what the verdicts mean, and how you can take part, check out our Reader’s Guide here. You can read about the team of editors and reporters who work on the factchecks here.
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