Proposal for landlords to pay less tax on rental income ‘smacks of desperation’

A proposal that would see landlords pay less tax on rental income have been criticised by the Opposition, who argued it “smacks of desperation” and would not increase housing supply.

Ahead of the budget one proposal circulated by the Department of Housing is a “distinct income-based approach”, according to a source with knowledge of discussions, which could entail a lower rate of tax or increased exemptions for landlords.

While Minister for Housing Darragh O’Brien has been clear in his goal to do something in the budget for both landlords and tenants, tweaking the tax system to favour income from rental has been stiffly resisted in the past by the Department of Finance and would likely face significant pushback again.

Labour Party Senator Marie Sherlock criticised the idea, saying it “smacks of desperation”.

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“Are we really serious in this country that we want to treat working people… different to the income that people generate from rental income?”

Ms Sherlock suggested this would not work, and added: “We hear from landlords who are leaving the sector they’re leaving for many other reasons. I don’t think trying to make an extra buck is the real reason behind that and hopefully the Department of Finance and Department of Public Expenditure shut that down.”

Separately, Social Democrats housing spokesman Cian O’Callaghan said the Government was “way off track” on its target for affordably homes, with only 22 cost rental homes delivered in the first half of 2023 and only 101 affordable purchase homes. “This level of delivery is derisory, it’s pathetic, especially seen in the context of half a million adults still living in their childhood homes.”

On the proposal to cut taxes for landlords he said it would not build a single additional home. “There’s a very real risk that what it will do is it will mean the price an investor will pay for a home will be higher and so it will push up house prices further”.

People Before Profit TD Richard Boyd-Barrett called for TDs to get behind his party’s Dáil motion to reinstate the eviction ban “at least until the housing and homelessness emergency has been resolved”.

In relation to a tax cut for landlords, he said: “I find it difficult to understand how landlords would be pleading financial difficulty when rents are at all-time highs.”

He said: “What we need to do is protect tenants, people who have done nothing wrong, who have paid their rent and are entitled, surely, to the basic thing of a secure, affordable roof over their head for them and their children... That should be the priority.”