Friday 28 October 2016

Landlords secure tax reliefs - but no cap on home rents

Paul Melia Environment Editor

Published 12/10/2016 | 02:30

(Stock image)
(Stock image)

TAX relief for landlords, an increase in tax-free income allowed under the Rent-a-Room scheme and extension of the Living City initiative to rental properties are among the measures aimed at boosting the private rental sector.

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But there was criticism of the lack of measures for tenants, including rent certainty.

Housing Minister Simon Coveney said among the measures which were "good for landlords" and aimed at supporting the sector was the extension of the Living City Initiative.

This is where tax relief is used to offset the cost of upgrading properties in run-down areas of Dublin, Cork, Limerick, Waterford, Kilkenny and Galway.

Other measures include restoring mortgage interest relief for landlords from 75pc to 100pc over five years. It rises to 80pc from next year and allows landlords claim tax relief on loans drawn down to purchase or improve rental properties.

The Rent-a-Room income ceiling has been increased from €12,000 a year to €14,000.

Above the tax-free threshold, any income earned is treated in the same way as other rental income and as a result, tax is charged at the marginal rate.

It is important to remember that this exemption does not apply to short-term lets, like Airbnb, under Revenue rules.

Meanwhile, a strategy for the rental sector will be delivered by the end of this year.

"The rented sector is a key focus under Rebuilding Ireland and in this Budget we have introduced a number of important supply incentives," said Mr Coveney.

Extending mortgage interest relief would send a "direct signal" to investors, he added.

But Fianna Fáil said affordable cost rental should have been introduced, while the housing charity Threshold said the only way to help first-time buyers save a deposit was to cap rents.

"We have seen many supports for landlords introduced in Budget 2017 but any tax relief should be matched with rent certainty for tenants," chairperson Aideen Hayden said.

Speaking on RTÉ's 'Drivetime', Public Expenditure Minister Paschal Donohoe said the issue of rent certainty was a "legislative matter, rather than a budgetary matter".

The Residential Landlords Association of Ireland said the budget changes were "totally insufficient" to tackle the shortage of rental accommodation.

Irish Independent

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