A more favourable tax and regulatory environment would encourage landlords to remain in the residential market and ensure a wider availability of rental homes, a property owners’ group has said.
In its pre-budget submission, the Irish Property Owners Association outlines a number of measures it believes would help to address the housing crisis and stem the flood of landlords from the private rented sector.
Minister for Housing Darragh O’Brien has strongly suggested that tax breaks for landlords will be included in next month’s budget with a view to slowing the exodus of small operators.
The association said its submission was drawn up following engagement with some of its 2,000 members, many of whom are, it added, exiting the market due to a combination of penal taxes and excessive regulation.
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The submission proposes the introduction of a 25 per cent rate of tax on residential rental income inclusive of the universal social charge and PRSI.
It also calls for an extension of capital gains tax relief for property owners, allowing them to benefit from reduced taxation when eventually disposing of their properties. The association said such a tax relief should apply to those who retain their rental properties for a minimum of seven years.
It also recommends a reduction in capital acquisitions tax for those inheriting residential investment properties. It says such payments often force families to sell properties to cover their tax liability, resulting in further losses of rental housing stock.
The association said it “firmly believes” that property owners would be willing to remain active in the rental market if the measures advocated for in its submission are earnestly considered.
Mary Conway, chair of the association, said a “vast majority of property owners already pay considerable taxes and duties” and that its proposals regarding fair tax treatment “should be viewed as a priority policy objective”.
“We believe that our proposals strike a balance between the needs of property owners and the broader housing market, and we call upon the Government to earnestly consider them in the context of next year’s budget.”