Tax breaks for landlords offering better terms to tenants should be considered, Cabinet advised

Tax breaks should be considered for landlords who offer better terms to tenants, a key advisory body to the Government has recommended.

The National Economic and Social Council, which provides advice on strategic policy issues, submitted a report to the Cabinet on Tuesday examining the massive shift in home-ownership and the associated growth in the rental sector.

The report, due to be published on Wednesday, recommends that “improved tax treatment of rental income could be introduced, and there is a case for linking this to more secure occupancy for tenants”.

It outlines that there has been a “major shift towards rental and away from home ownership”, with renters growing as a cohort from 8 per cent in 1991 to about 18 per cent in 2016. The council suggested that significant actions were needed to improve the lot of renters and the structure of the rental sector.

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The report says there is a “continuing rationale” for ownership but highlights that there is a “potential to reduce the need for individuals to become homeowners by continuing reforms of the rental sector and efforts to drastically grow the alternative non-market rental sector”. It says vacant properties could add significantly to the rental stock if brought back into use.

During Leaders’ Questions in the Dáil Sinn Féin leader Mary Lou McDonald said a ban on evictions, due to expire at the end of next month, should be extended until the end of the year. The party has also called for legislation to ban rent increases for three years, as well as for a month’s rent back into tenants’ pockets in the form of a refundable tax credit.

Ms McDonald said the situation in the rental sector was “now beyond crisis mode” with people in their late 30s and 40s “stuck in house shares because they can’t afford to rent a place of their own”. She said the latest Daft.ie rental report was “a nightmare read for workers and families caught in the private rental trap”, highlighting that rents in Ireland increased by 13.7 per cent on average last year.

The Dublin Central TD said all counties bar one saw double-digit increases, some of which were “frightening”.

“Week after week you come in here, Fianna Fáil and Fine Gael, and gaslight Ireland’s renters by telling them that your housing plan is working, but how you can make that claim to people who handed over the lion’s share of their income in rent and who then see the rest of their income gobbled up by sky-high energy bills, childcare fees, grocery bills, is beyond me,” she said.