A new report has called on the coalition to change its housing policy on several fronts, including the introduction of tax breaks for landlords.
Despite the Government’s Housing for All programme, the National Economic and Social Council’s (NESC) report on Private Rental in Ireland said that the sector is “contracting at a time of rapidly growing demand” and that “immediate action was required from Government”.
It also called for the introduction of “NCT-style” checks where landlords would have to “demonstrate compliance with minimum standards”.
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NESC said that increasing housing supply would “greatly ease the pressures evident in the private rental sector”.
“Social housing, cost rental and affordable home ownership have the potential to provide options for many in the private rental sector or who are searching for this type of accommodation,” it said.
One of the key recommendations in the report involves introducing tax breaks for landlords. NESC referenced an Amarch Research poll that found that of landlords who wanted to sell their properties in the near future, 30% said that being a landlord was not profitable, while 25% said that tax was too high on rental income.
For higher-rate taxpayers, tax on rental income is typically 52%.
NESC argued that one way of encouraging landlords to stay in the market and encouraging new ones to enter would be “more favourable tax treatment”.
“If more generous tax treatment of rental income were to be introduced there is a case for linking this to more secure occupancy for tenants,” they added.
They noted, however, that this would not increase the number of homes available for buyers.
NESC also called on the Government to introduce stricter rules to ensure that properties are up to standard.
They said that “effective action” was needed to address standards in rental properties, including considering the introduction of an NCT-type system where landlords would have to demonstrate compliance with minimum standards
In the short term, NESC advises that the “best opportunity to alleviate the rental crisis” is to tackle vacancy. It also suggests that the government should consider introducing rules that require owners of vacant properties to make them available for rent.
The Social Democrats’ Cian O’Callaghan told the Irish Mirror that if tax breaks for landlords were introduced, renters would also have to benefit.
He said: “If there was better tax treatment brought in for landlords, tying that in with better security for renters would be the way to do it.
“If you didn’t have better security for renters, that would be a mistake. You should be trying to improve things for both cohorts.
“It could be an opt-in or voluntary system for landlords to avail of better taxation."
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