Sir, – Readers of Una Mullally’s column (“Emigration to Australia is at its highest level for a decade. We need to ask why”, Opinion & Analysis, December 21st) may be puzzled as to why it is possible to rent a property more cheaply in Sydney than Dublin, despite median house prices in Australia being approximately 75 per cent higher than Ireland’s.
The answer is likely to be found in the difference in incentives created by the tax and regulatory systems in each country. For example, under Australia’s so-called “negative gearing” rules, any losses for a landlord on their rental properties may be fully offset against their income tax from other sources, creating a strong incentive for small landlords to develop a rental portfolio even when it would seem uneconomic to do so.
In Ireland, by contrast, the tax and regulatory system seems designed to drive landlords out of the market. For example, not all costs associated with owning a rental property by a landlord are tax deductible, losses on one property cannot be offset against income from other properties or other sources of income, and regulations impact on the ability for landlords to freely set rents or end tenancies.
Unsurprisingly, the number of small landlords in the Irish market has steadily decreased in recent years (in contrast with Australia), with the consequent supply squeeze evident in the cost of Irish rentals. – Yours, etc,
PHILIP WHEATLEY,
Bray,
Co Wicklow.