Allowing landlords some tax reliefs would go some way to help ease housing crisis
Published 11/11/2015 | 02:30
I have a confession to make. I am a (non-professional) landlord. It's not something I boast about these days as "landlord" has become a grubby word in Ireland. I am almost ashamed to admit to my shady sideline.
Landlords have got a very bad name, and have become the fall guys for the housing supply crisis which has seen property prices spiral out of the reach of so many. They are unfairly branded as mercenary, Dickensian-type figures whose greed is destroying the lives of a generation of people.
But landlords are not all rogues, and this is not the full, balanced picture.
I bought some investment properties in Carlow and Kilkenny in the late 1990s and early 2000s before the peak of the boom and the subsequent crash.
They were new three-bed semi-detached builds. It made sense at the time, and was a substitute for putting lots of money into a decent pension fund.
With two kids, there was also the hope that these houses would help give them a leg-up when it was their time to get on the property ladder.
The banks, by the way, were only dying to give the money.
We had saved a loan for the first property, and the equity on that and our family home was enough to get loans for two more.
Thank God we got sense and decided to leave it at three, otherwise we would be in serious negative equity and under financial pressure now.
The experience has not been bad. Yes, there have been a few problems over the years, but for the most part there has been fair play on both sides.
For example, one tenant who was low on funds at one stage agreed to paint the house in lieu of rent.
But it has not been a money-making machine. We don't break even. Believe it or not, landlords are liable for tax and other fees.
This week is the tax return deadline, and I and thousands of landlords around the country have been busy getting all the figures together.
While certain costs can be written off against tax, one of the biggest annual outlays, the local property tax, is still not deductible.
And you can't write off when tenants fall behind with their dues.
There is always major expense when there is a tenant change-over. You are guaranteed that the house needs a full re-paint and furniture replaced.
There was little joy in this year's Budget for landlords, with no tax reliefs. I think this could have a part to play in easing the housing crisis in the rental sector, as tax reliefs can take immediate effect.
With a massive housing shortage, market forces are naturally going to come into play, and it is no surprise that rents have gone up in the past year, especially in Dublin where demand is most acute.
It is the same when, for example, there is a global oil shortage. The price of oil increases.
And what is complicating matters at the moment is the Government's ill thought out attempt to introduce rent control by the back door.
Yesterday, the Cabinet agreed measures from Environment Minister Alan Kelly and Finance Minister Michael Noonan whereby rents can only be increased every two years, and landlords who attempt to evict tenants by claiming they are selling properties in order to find new tenants at a higher rent will face fines of up to €3,000 if it subsequently emerges that they did not sell.
While there is no doubt there are unscrupulous operators - and some heartbreaking stories have emerged in the media - it does seem that landlords across the country were being punished for the actions of a small percentage based in Co Dublin.
I am not condoning exorbitant rents and turfing families out on to the street.
But there is a place for a fair, responsible landlord in our world. In fact, they are a vital cog in the general housing scheme.
Landlords are regulated. The establishment in 2004 of the Private Residential Tenancies Board (PRTB) to operate a national tenancy registration scheme was a welcome move.
It is there to resolve disputes between landlords and tenants and to advise the Government on the sector. Its dispute resolution service replaces the courts in relation to the majority of landlord and tenant disputes.
But one would wonder if it has any teeth.
It emerged this week that 30,000 landlords are failing to register tenants.
This is not acceptable, and questions must be asked about lack of enforcement.
I have not put up the rent on any of my investment houses in the last three years.
Many people have said to me in the last few months that I am mad not to do so, given the current climate. It is something I will look at.
But peace of mind with current reliable tenants and a clear conscience means more to me than going in for a fast buck.
That is my view.
But it must be said that landlords are not charities and most are in it to make a few bob. They can't be blamed for operating as a business. But, of course, they have to show some humanity too.
The current housing supply crisis is not one caused by landlords.
It falls at the door of the Government and planners for ignoring warnings and failing to anticipate housing demand.