Landlords should pay 25% tax on their rental incomes, an industry insider has suggested.

Rents in Ireland are currently at their highest recorded level since 2006 but Pat Davitt of the Institute of Professional Auctioneers & Valuers believes that many landlords are quitting the market because “they can’t get the proper rent for the property.” 

Ireland is one of the most expensive countries in the world to rent and many people struggle to afford a place to live as it is.  As a consequence, rent pressure zones were introduced in 2016 and landlords can only increase the rent on a property by 2% a year. 

However, Mr Davitt says it means that landlords with long-term tenants are unable to charge the rates paid by tenants who move into newly built homes:

“New properties coming into the marketplace, the rents in many cases are twice what many landlords are being paid at the moment and it’s very unfair,” he complained. 

“So we’re trying to have some [fairness] in the marketplace from that point of view. 

“We’re also trying to have some [fairness] from a tax point of view because small landlords are paying up to 55% tax when a lot of the funds that rent these properties are paying no tax.” 

A general view of construction work on an affordable housing scheme in Dublin. Picture by: PA Images/Alamy

The Government is looking at ways to increase the supply of rental properties in Ireland and Mr Davitt said that slashing the amount of tax they pay is one thing that would help: 

“We’re looking at a new tax rate for landlords of 25% across the board,” he continued. 

“And we think that would give some [fairness] to smaller landlords instead of the amount of tax they’re paying at the moment.”

Main image: House keys.