IF LANDLORDS GET tax breaks in September’s Budget, renters should also get concessions too, according to Tánaiste Leo Varadkar.
His comments come on the back of the most recent Daft.ie report which finds that Ireland’s rental market has dropped to new depths as the number of homes available has dropped to an all-time low while the rate of inflation in prices climbed to its highest level in at least 15 years.
The property search website’s latest rental report finds that rents in the second quarter of this year climbed to an average of 12.6% higher than the same period of 2021.
This dramatic spike is the biggest increase recorded by Daft since it began carrying out its reports in 2006 and it came as the availability of rental homes dropped to an all-time low. The average market rent across Ireland between April and June was €1,618 per month.
Varadkar said the answer to solving the rental crisis is more supply, the continuation of the rent pressure zones which caps rent increases at 2%, as well as measures to “reduce the speed at which landlords are leaving the sector”.
“I know it may not be popular to say, but the truth is more and more landlords everyday are just selling up and have decided it’s easier to sell their property than to continue to rent it and we just need to reflect on that and see what we can do to improve things,” he said.
Tax breaks
In relation to tax breaks for landlords, Varadkar said:
“I do think that if there are any significant income tax or tax concessions for landlords in the budget, well there should be for renters as well,” he said.
“It wouldn’t be fair to say that we’re going to give tax concessions to landlords, in order to keep them renting, which would be a good thing, but then to say to renters ‘well there’s nothing in it for you’ – that wouldn’t be fair,” he said.
The Tánaiste added that proposals have not been worked out or agreed in relation to the budget, adding that the three coalition party leaders have discussed nothing specific at this stage.
However, Varadkar said introducing some tax changes in the budget to encourage landlords to stay renting and stay in the market is a “good idea”.
The idea of tax breaks for landlords to keep them in the market was floated by Housing Minister Darragh O’Brien in May, where he told the Dáil that in order to retain individual landlords in the system, it “may require tax measures”.
Tax percentage
At the time, he asked Sinn Féin’s housing spokesperson Eoin Ó Broin if he would support such a measure.
When pressed on the issue today on RTÉ’s News at One today, Ó Broin said he was yet to be convinced by the proposal, but said that he was willing to sit down with all stakeholders, including those representing landlords, to find out what percentage of tax would keep them in the market. He stated no specific tax percentage proposal had been submitted from the sector.
When asked if there was a way to ensure that tax breaks for landlords could be passed on to renters in some form, Varadkar said today that he believed such a measure would be difficult to administer.
“And that’s actually really important when it comes to tax and welfare that whatever you do, is actually possible and efficient to administer. There are different things you could do. But I think if you had a tax break for landlords, and that was conditional on them passing on some of that to renter, I’d be concerned that wouldn’t work. But the objective should be that if we do anything in the tax base to help landlords well something has to be done for renters as well,” he said.
Varadkar said the Government “very much appreciates this is that it is very hard to find somewhere to rent and rent in Ireland are very high”.
The Government is working to increase the supply of cost-rental properties, said Varadkar, who added that they are coming on stream now.
Note: Journal Media Ltd has shareholders in common with Daft.ie publisher Distilled Media Group.
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