Increasing the renters’ tax credit to €800 “does not go near enough”, a leading property expert has claimed. 

Last year, the budget introduced a €500 tax credit that all renters in Ireland can claim to offset the soaring cost of housing.

As budget negotiations continue, Housing Minister Darragh O’Brien has suggested the credit could be increased to €800.

On The Pat Kenny Show, the CEO of Property District said she would welcome any increase to the credit but warned more needs to be done.

“I would say that it does not go near enough,” Carol Tallon said.

“The reality is that rent at the moment is crippling people.

“While this is welcome… but this is not enough and not enough; I think we need something much more radical to actually help the current generation who are stuck in rental accommodation become homeowners during their lifetime.”

Earlier this year, a report by Daft.ie concluded rents in Ireland had risen by 14% in the space of a year and house prices are hovering around the same level they were during the Celtic Tiger.

An 'Apartments for Rent' sign is seen in June 2019. Picture by: Todd Bannor / Alamy Stock Photo

Ms Tallon said one policy the Government could introduce to help people get on the property ladder was extending the First Home Scheme equity scheme to second hand houses.

Under the scheme, the State buys a stake of up to 30% in a property and Fine Gael have said they want the scheme to be extended to include second hand homes.

“That’s the scheme I welcome most,” Ms Tallon said.

“While we understand the importance of stimulating new builds and encouraging new builds into the market… the reality is new builds are costing more than 100,000 more than existing buildings on average.

“As we look towards sustainability, we need to do more to tackle the vacant and derelict homes and secure the existing home market.”

Reform

Sinn Féin housing spokesperson Eoin Ó Broin expressed doubt Minister O’Brien would be able to get everything he wanted from budget negotiations and said the renters tax credit needs to be reformed.

“Sinn Féin has long argued for a refundable tax credit that would put a full month’s rent back into every renters’ pocket,” he said.

“That type of tax credit would actually be based on the rent that the renter pays.

“The problem with Darragh’s proposal, even though an increase would be welcome, is it’s filled with all sorts of inequities.

“You and I could be two renters living next door; you could be a single income renter paying €1,500 a month, I could be a couple and therefore we’re sharing the rent burden.

“We would get two of Daragh’s tax reliefs but you would only get one.

“Therefore it needs to be based on the rent that people pay.”

Deputy Ó Broin described house prices as “too high” and said the delivery of new homes should be the priority.

“So, the really radical policy is actually delivering large numbers of homes at dramatically reduced prices through the Affordable Housing Scheme that we’ve been proposing for some years,” he said.

Budget 2024 will be delivered by Ministers Michael McGrath and Paschal Donohoe in October.

Main image: House keys.