The Government needs to introduce a raft of tax measures urgently to encourage small landlords to retain their properties in the rental market in an effort to ease the housing crisis, Focus Ireland and Chartered Accountants Ireland have warned.
In a briefing paper published on Thursday, the charity and accountants body call for a number of changes to how small landlords are treated by the tax code, in the hope that they will remain in the market for longer, instead of seeking to sell their properties which could mean the eviction of tenants in the depths of a housing crisis.
“One of the biggest causes for families becoming homeless in recent times is that they are losing their homes in the private rented market as landlords are selling up and leaving the market,” Focus Ireland chief executive Pat Dennigan said in a statement. “Urgent policy responses are required which should be targeted at landlords who are considering evicting their tenants to sell over the next number years, convincing them it is in their interest to stay, or not to evict when they are selling.”
Thousands of landlords with a small number of properties, as well as people who became so-called accidental landlords as a result of the property crash a decade ago, have sought to leave the market in recent months. People selling investment properties accounted for about 40 per cent of all home sales in the final three months of 2022, the Society of Chartered Surveyors of Ireland said in January.
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The measures both bodies are calling for include: doubling wear and tear rates to 25 per cent to allow better maintenance and refurbishing of properties without evicting tenants, providing 100 per cent capital allowances for the cost of retrofitting homes to improve their energy rating if tenants are allowed to remain in place, giving the same tax treatment to individual landlords and corporates, while allowing for the deduction of local property tax against rental income.
They also are seeking so-called succession reliefs which capital gains retirement relief and capital gains relief for buying a home that is already rented out with tenants in place.
“Small landlords are an essential feature of a fully functioning residential property market, and properties owned by these landlords are more likely to be in regional, less densely populated parts of the country,” Chartered Accountants Ireland director of public policy Brian Keegan said. But “renting as an investment is becoming less attractive for these smaller landlords,” he added, amid an increase in regulation.
