Calls for the introduction of new tax breaks for landlords are “absolutely ridiculous”, Sinn Féin has said.
The Institute of Professional Auctioneers and Valuers (IPAV) is calling for the re-introduction of Celtic Tiger-style tax breaks for landlords to boost supply in the rental market.
The group is calling for the reintroduction of the ‘Section 23’ tax scheme which was discontinued after the financial crash.
Under the scheme, investors were offered generous tax breaks for renovating or purchasing properties for the rental market.
IPAV believes the introduction of a similar scheme now would create the market conditions needed to speed up the delivery of new rental properties.
On Newstalk Breakfast this morning, however, Sinn Féin finance spokesperson Pearse Doherty labelled calls for any sort of landlord tax break ‘ridiculous’.
He noted that the government introduced a tax break for landlords in last year’s budget at a cost of €160 million – even though many senior Department of Finance officials warned against the move.
“[the officials] argued that this was a throwback to the crisis era,” he said.
“They argued that it wouldn't work and they also made the point - and this is what many of your listeners won't know, and I'm sure others won't tell - that one-in-four landlords now across the State because of what Fianna Fáil and Fine Gael did in last year's budget, pay no tax whatsoever.
“So the idea that, as IPAV have talked about, people charging €2,100 in rent while some landlords actually pay no tax whatsoever on their income [should get a tax break], I think it's just ridiculous to tell you the God’s honest truth.”
Housing
Asked whether Sinn Féin would introduce any measures to incentivise landlords, Deputy Doherty said the Government should be supporting tenants instead.
“I think landlords at the minute are charging rents that we've never seen in the country before and we've seen tax incentives that have been brought in for landlords that actually increase their profits, not decrease their profits over the last number of years,” he said.
“This idea that we need to continue to make landlords pay less tax than the average worker is absolutely ridiculous.
“What we need now is to support tenants.”
A housing development under construction, Carrigaline, County Cork. Image: David Creedon / Alamy Stock PhotoHe said Sinn Féin would move to reverse the €160 million tax break that was brought in last year.
“It is a waste of taxpayers’ money,” he said.
“Every single official in the department argued against it and the Government decided to go ahead with it even though a tax expert said it was the stupidest tax break in our history.”
Section 23
Also on the show, IPAV CEO Pat Davitt said a ‘Section 23-style’ scheme is needed to stem the flow of landlords leaving the private market.
“We need to get more properties back into that market and we need to encourage people to bring them back in,” he said.
“There is more stick in the rental market than there is carrot and we need now to encourage people to bring properties back into that market.”
Exodus
He suggested that tens of thousands of landlords have left the market in recent years.
“Between 2021 and 2023, there was a drop-off of over 70,000 landlords in the figures the [Residential Tenancies Board] were producing at that particular stage,” he said.
“We do know as well that there's a drop off of tenancies between 2021 and 2023 of in the region of 40,000 or 50,000, again over 40%.
“That's a huge drop off of tenancies and landlords.”
Residential Tenancies Board
The latest Residential Tenancies Board (RTB) figures show that landlords with more than 100 properties now account for more than 22% of the Dublin’s rental market.
The ‘Profile of the Register’ report shows that the number of private tenancies registered with the RTB has increased in recent years – from around 213,000 in this time last year to 230,000 at the end of March.
Meanwhile, there were over 103,000 private landlords registered in Ireland in March – up from nearly 97,000 this time last year.
