Tax breaks for landlords would be an "unfair" and "expensive" way to tackle the housing crisis, a Trinity professor has warned.

The Government is considering introducing a tax break for so-called ‘small’ landlords in the Budget to encourage them to stay in the market.

Those in favour of the tax breaks have said it would encourage private landlords to remain in the housing market, while others warn the plan is not a viable solution to the housing crisis.

On Newstalk Breakfast, Trinity College Dublin assistant professor in economics Dr Barra Roantree said the policy would potentially cost "hundreds of millions" as the landlords are expected to receive a tax-free allowance of "€14,000 each".

"People who are landlords are toward the top of the income distribution and giving them a tax cut of this size when others aren't getting one, I think legitimately could be called unfair," he said.

'Credible evidence'

Professor Roantree said there is "fundamentally, no credible evidence" that the tax-free allowance will boost rental supply.

"We actually don't have good enough data on how many [landlords] are leaving [the market]," he said.

"The issue around why they're leaving isn't to do with the tax treatment."

Many landlords entered the market in their 30s and 40s, according to Professor Roantree.

"They're reaching retirement and they're deciding they don't want to be a landlord anymore," he said.

"There are about 160,000 individual landlords who report rental income to revenue; how many of them are thinking about leaving and how many will be stopped by this policy?

"Unless that number is above 100,000, you're talking about giving a tax break of, in effect, tens of thousands of euro per year to encourage a small number of landlords to stay in the market."

'Overdue'

Sherry FitzGerald Managing Director Marian Finnegan rejected Professor Roantree's suggestion landlords are "toward the top of the income distribution".

"[The] assumption there that the landlords are the upper echelons of society is one of the reasons we have this problem," she said.

"A lot of the landlords that are leaving are not people in their 40s, 50s, 60s as he suggested ... they are ordinary individuals who perhaps are accidental landlords and now have absolutely no choice left but to leave because the cost of retaining that asset is simply too expensive from a tax perspective.

"The cost rental solution is part of the solution, the private rental sector is part of the solution, but it doesn't solve the rental crisis in the vast majority of tenancies in Ireland."

Landlords

Professor Roantree suggested increasing the expenses landlords can claim and reducing the VAT on new builds.

"We don't allow those, in enough, to be deducted from tax income," he said.

"A much more effective use of around the same cost will be reducing VAT on new build construction.

"That will actually have the effect of making some projects – that aren't viable at the moment – viable."

'Pontificating'

Ms Finnegan said increasing the number of homes being built "doesn't naturally translate" into those homes being purchased by landlords.

"Landlords are not buying into the marketplace in anything like the quantity that we need, but they are exiting in very, very large volumes," she said.

"The time for pontificating now as to whether this particular tax measure is going to work, it's well gone. We've been doing that for a decade, we need measures to be brought in quickly."