The tax landlords pay on rental income should be cut in half to keep them from leaving the market, according to Fianna Fáil Senator Lisa Chambers.
It comes after property owners’ groups called for a new tax rate of 25% for landlords to be introduced in the budget.
The Irish Property Owners Association (IPOA) and the Institute of Property Auctioneers and Valuers (IPAV) said the new rate could keep landlords in the rental market and support new investment.”
They noted that the move would ensure that investment fund and smaller landlords would be paying an equal amount of tax on their income.
On The Pat Kenny Show this morning, Senator Chambers said the proposal could help stem the exodus of smaller landlords from the market.
She noted that more than 3,000 landlords sent notices to quit to their tenants in the first half of the year – more than the double the figure we saw last year.
She called for tax breaks for both landlords and renters.
“I think it’s important that, if we’re looking at a tax break for landlords - and these are small landlords that are paying income tax, we’re not talking about the big commercial landlords - that it’s matched with an equal tax relief for renters,” she said.
“Those tax breaks [should be] conditional on longer and more secure tenancies so if you are to get a tax break as a landlord, I think they should be required to at least offer a tenancy for a five or a ten-year period.
“That way, both landlord and tenant will benefit and we should hopefully try and stop what is really an exodus of small landlords from the market.”
Senator Chambers said her proposal is ‘necessary’, even if it represents a “double whammy” for the Exchequer.
“I think it is warranted in the current crisis that we are in in terms of rental properties,” she said. “There are so few rental properties.
“Clearly landlords are choosing to exit the landlord sector. They don’t want to be landlords anymore - the smaller landlords - they want to sell up and get out and we need to stop that happening at the rate it is happening.”
Also on the show, Labour housing spokesperson Rebecca Moynihan said the property owners’ group proposals would lead to even further inequality between landlords and renters.
“What the landlord’s associations are calling for is even more unequal treatment,” she said.
“That is the unequal treatment between what they’re proposing landlords will pay and what people who go out and work a job and are paying exorbitant, outrageous rents are currently paying to them for what will be a capital asset.”
She said smaller landlords are leaving the market because they were accidental landlords in the first place – not because of the tax regime.
“Being a landlord should be looked at and seen as a job as opposed to a side hustle where somebody else is both paying a capital asset for you and also paying you a profit,” she said.
She said it is “incredible” that landlords are talking about a rental crisis and suggesting they are the one coming out badly, “rather than people who are paying over €2,000 in rent”.
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