Proposed tax breaks for landlords offering long-term leases show “Ireland is finally getting its head around the fact you can’t treat renters like crap,” according to Ciara Kelly.
She was speaking after it emerged that government is considering two major rental incentives in the upcoming budget.
The first would see renters offered a tax credit on their monthly rental payments, while the second would see landlords offering long-term leases handed extra tax reliefs.
On Newstalk Breakfast this morning, presenters Shane Coleman and Ciara Kelly clashed over how effective the proposals may be.
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Ciara kicked off the debate by saying the changes are “long overdue.”
“I think it marks a maturing of the rental sector,” she said. “I think it is a reflection of the reality that for many people, before and heretofore, we viewed renting as some kind of a temporary thing,
“So it didn’t matter if your accommodation was crap, it didn’t matter if your security of tenure was crap, there was no ability for people to live long-term with any kind of security in rented accommodation – that doesn’t reflect people’s reality.
“This is a really positive move. This will allow tenants to do things like maybe decorate, maybe have a pet, maybe raise a family. It will force people to look at things like storage in their accommodation – all those kinds of things are really positive things.”
'You can't treat renters like that'
She said the proposed tax credit for renters is “massively important.”
“We have given things like mortgage interest relief for years to homeowners,” she said.
“They are the ‘haves’ in our society. The ‘have-nots’ are generation rent and vast swathes of the population fall into that group.
“They’ve had no succour whatsoever. They just lash out their rent - dead money as we used to describe it - with no kind of comeback and no supports. None of those things.
“This is a really positive move and finally Ireland is finally getting its head around the fact that you can’t treat renters like crap and that some people, possibly, will rent long-term – maybe forever.”
"Non-solution"
Shane on the other hand, labelled the plan “an Irish non-solution to an Irish problem”.
“Firstly, it will make zero difference,” he said. “The only thing that will make a difference to rent levels in Ireland is increased supply.
“We’ve had this before. We’ve had tax credits before. In fact, we had them as recently as a decade ago. They didn’t work in the Celtic Tiger in bringing down rents.
“In fact, what a tax credit for renters may do, very similarly to the old first-time buyers grant, is actually lead to an increase in rent.
“Landlords will go well you’re getting that tax credit; I’m just going to put that on to the cost of rent.
“So, it won’t work, it could lead to an increase in rents and we don’t even know how much it’s going to cost. The old scheme I think cost about €100m, so it will probably be a multiple of that.
“This tinkering with the tax system and tinkering with various issues – it never works. What we need is increased supply. That is the only thing that matters.”
