Donnelly lobbied for tax breaks for ‘accidental landlords’ for four years

Minister for Health Stephen Donnelly lobbied for tax breaks for landlords for more than four years, seeking measures that were rejected by the previous government over fears it would allow people to “game the system”.

From 2014 until 2017 in the Dáil, Mr Donnelly repeatedly raised the plight of “accidental landlords” during various debates and tabled multiple amendments to legislation for different tax treatment for accidental landlords.

Under his proposals, accidental landlords would be tax exempt on their rental income.

During the 2020 general election, the Fianna Fáil TD described himself on television as an “accidental landlord” and said he was in negative equity. In multiple debates Mr Donnelly specifically called for relief for accidental landlords who are in negative equity.

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During a debate on the Finance Bill in November 2017, Mr Donnelly said his suggestions had been rejected by former finance minister Michael Noonan, and that he was planning to have a meeting with Minister for Finance Paschal Donohoe.

At the time, Fianna Fáil and Fine Gael were in a confidence-and-supply arrangement. Mr Donnelly joined Fianna Fáil earlier that year.

[ Donnelly admits he paid a €100 fine for late RTB registration ]

[ Stephen Donnelly admits failing to register Dublin rental property for three years ]

[ Politicians move to explain absence of rental properties from tenancy register ]

In comments to a committee examining the finance Bill on November 9th, 2017, Mr Donnelly said: “For several years I have tabled amendments to try to create an exemption for accidental landlords to stop them from being double taxed. The problem with this scenario is that their rental income is taxed at the marginal rate.

“I have provided analysis to the previous minister for finance that showed that many people under very modest assumptions end up with tax bills of €5,000 to €6,000.

“When I previously tabled amendments to address this issue before, the then minister for finance, Deputy Michael Noonan, came back and consistently refused to accept them on the basis that it could be a loophole for other people to avoid paying taxes. He said it was too easy to game the system,” Mr Donnelly said.

Mr Donnelly again lobbied for the measure during a debate on the 2016 Finance Bill debate.

One amendment tabled by Mr Donnelly to that debate asked that “where an individual has rented their primary residence and is also renting another property, to apply full deductibility of rent paid on rent received, for the purpose of calculating tax liability.”

“The amendment I propose, and I appreciate it probably needs to be checked by the Department and Revenue, is targeted at these accidental landlords, is to state that we do not want them hiding from Revenue or trapped in a one-bedroom apartment with three children, so we will make the move tax neutral.”

There has been scrutiny of Mr Donnelly’s property affairs after The Irish Times revealed Mr Donnelly failed to register a rental property in Dublin for the past three years with the Residential Tenancies Board (RTB) and only did so late last week after it emerged Fianna Fáil TD Robert Troy had also registered a property late.

Mr Donnelly is renting out a property in Sandyford which he declared on the Dáil Register of Members’ Interests.

The Irish Times reported that a tenancy registry was not renewed in 2019 as required under law. Mr Donnelly has blamed an “oversight”.

It was registered early last week, days after a story emerged that Mr Troy had also not registered a property on time.