Saturday 22 July 2017

Rent caps and harsh tax treatment 'preventing' landlords from renting

(stock photo)
(stock photo)

Rebecca Lumley

Rent caps, harsh tax treatment and uncertain future policy are preventing landlords from renting, according to the Irish Property Owners Association (IPOA).

Margaret McCormack from IPOA said the state pressure on landlords is causing a lack of accommodation and pushing rent prices up.

“The Government has made it difficult for people to manage property and the more difficult something is, the more of a disincentive it is to do it. Tax treatment is pulling people out of the sector, as well as the legislation around the sector,” Ms McCormack told Independent.ie.

New figures show that available rental accommodation in Co Dublin is at its lowest since 2006. The figures also showed that rents have risen nationally by 13.4 per cent year-on-year, as outlined in Daft.ie’s first quarterly rental report of the year.

Ms McCormack said that in order to increase supply of rental property, the Government must “stop interfering in the market” and incentivise landlords.

“The first thing they need to do to protect their existing supply and by that they need to do fair tax treatment on them.”

She added that there was a massive surplus of accommodation in 2008 and 2009, but now these dwellings are empty.

“Most of those were empty, and they’re now let. But the number of rental properties themselves have not gone up. Although people have moved into those properties, an awful lot of the existing landlords left the sector because they couldn’t afford to stay in there.”

A number of rent controls have been imposed on landlords in recent years in order to regulate the industry, including the creation of rent pressure zones last December in areas where rents were rising swiftly.

“They’ve got to stop interfering in the market. You cannot let something today long term because you don’t know what interference is coming down the line. There’s no trust in the Government.”

Threshold’s Dublin Services Manager Stephen Large said the cap does not change the fact that rents are at an all-time high and are proving unaffordable for many tenants.

“The four per cent cap operates from a very high starting point, as market rents are at an all-time high. It’s coming from a very high baseline where people are struggling to pay rent anyway,” he said.

“Until we actually have supply, nothing is going to make much of a difference in the current climate. Units have to be built and we have to hold on to what’s already there.”

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