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Smaller landlords say rules and taxes are forcing them out of the rental market

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Small-scale landlords are leaving the market in their droves. Photo: Graham Moore

Small-scale landlords are leaving the market in their droves. Photo: Graham Moore

Small-scale landlords are leaving the market in their droves. Photo: Graham Moore

LANDLORDS have blamed what they claim are constantly changing regulatory rules and high taxation for a mass exodus of landlords from the sector.

And they have hit out at rent-pressure zone (RPZ) rules, claiming they are creating a two-tier rental market.

The RPZs, brought in a bid to control run-away rental inflation, create a situation where maintenance of quality accommodation is not economically justifiable, they say.

Landlords said the rent limiting rules are also impacting on capital values of their properties.

The Institute of Professional Auctioneers and Valuers (IPAV) and the Irish Property Owners’ Association (IPOA) say that just one new landlord is entering the market for every two selling up.

The two bodies said that the landlords who are leaving the market in the great numbers are likely to be those historically charging rents under market rate.

RPZs confine them to minimal increases.

These landlords are replaced in the market by new properties at much higher rents and owned by institutional landlords.

The IPAV and IPOA said there was no evidence to confirm if any net additional new properties have come onto the rental system.

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“Rent Pressure Zone regulation has prevented rents from falling as well as rising beyond the limits set,” chief executive of the IPAV Pat Davitt said.

He said the private landlord has traditionally been the mainstay of the Irish rental market.

The private rental market is in crisis with rents shooting up by 12pc in the past year, according to Daft.ie.

Average monthly rents nationwide are now €1,567, according to the latest report from Daft.ie. This is more than double the low of €765 a month seen in late 2011.

Just 851 homes were available to rent nationwide at the start of the month, down from more than 3,600 a year ago.

State regulator, the Residential Tenancies Board says 5,617 termination notices have been issued by landlords to it since 2019.

Mr Davitt small-scale landlords were being sacrifices in favour of international funds.

He said there was a huge difference between how the State treats private and institutional landlords.

“We need both but they deserve to be treated equally and fairly and policymakers need to deliver on that. Otherwise rent levels into the future will be dictated less by the kind of market forces we’ve experienced historically and more by trends in complex global property investment vehicles,” he warned.

Small landlords have to pay up to 52pc of the rental income is paid back to the Exchequer in PAYE, PRSI and USC.

In contrast, institutional landlords make significant profits in the Irish market, but pay no tax.

The dividends paid to shareholders are subject to tax, but as many investors are non-resident, there is no return to the Exchequer, according to a report done for the IPAV and IPOA by economist Jim Power.

Mr Davitt said there are no up-to-date accurate figures on how many leases and landlords are currently active in the market.

This is because where tenants leave of their own accord or leave because properties are being sold, such leases may still be recorded as active leases in RTB figures.

Chairman of the Irish Property Owners’ Association Stephen Faughnan said there was

An “exodus of private landlords from the market in large numbers”.

“Issues such as penal tax rates and a tax code that discriminates against private landlords in favour of large institutional funds, together with the continually changing and ever more complex regulatory environment all militate against investing in the private rental sector,” he said.

He said Residential Tenancies Board shows that private non institutional landlords are by far and away the single largest landlord set in the market.



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