Minister for Finance Jack Chambers has ruled out further tax breaks for landlords in the Coalition’s final budget despite calls from his party colleague, Minister for Housing Darragh O’Brien.
Mr Chambers said that his predecessor in the Department of Finance, Michael McGrath, had introduced changes for landlords in last year’s budget.
“Minister McGrath introduced changes in this last year and we set out a two- to three-year trajectory of how that would work when it came to certain expenses for landlords if they stayed in the market, and I think we need to allow them to settle. I have no plans for any further tax cuts,” he said.
In Budget 2024, the Government agreed to tax reliefs which allowed landlords tax relief worth between €600 and €1,000 up to 2027.
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Also on budgetary matters, Mr Chambers said that there was “consensus within Government” that the threshold around inheritance tax was too low, and that he was working on options to shift that as part of Budget 2025, but that no decisions had been taken.
Regarding the business lobby’s request for restoration of the 9 per cent VAT rate for the hospitality sector, he said that with €1.4 billion to spend on tax cuts, his key focus was income tax rather than business taxes.
“That leaves limited scope for other areas of taxation,” he said, while noting there were no decisions taken on the “additionality” that would be available as part of the budget. He said investment and growth of indigenous businesses was a “much bigger question than on tax policy alone”.
Coalition conflict as the budget draws near
Asked about increased rights to sick pay, the living wage and other labour rights which businesses have complained are increasing costs for them, Mr Chambers acknowledged there had been a “significant” cumulative impact arising from Government decisions.
“We have to consider those decisions in the round,” he said but added that he would listen to businesses and consider their concerns as part of the budgetary process. His colleague, Minister of State for Enterprise Dara Calleary, added that there was €251 million released by the Government to businesses since April towards increased costs, saying that was a “hell of an investment”.
Responding to criticism from the State’s fiscal watchdog about the inflationary effect of Government spending, the Irish Fiscal Advisory Council (Ifac), Mr Chambers said he welcomed their role but that spending growth was in line with last year. The Coalition will, for a third year, breach its own spending rule, increasing spending by 6.9 per cent rather than by its self-imposed limit of 5 per cent.
He also noted Government decisions to invest in long-term funds using budgetary surpluses, adding that it was government’s role to “strike a balance” between the Ifac and others who call for “much greater levels of spending growth”.
He criticised Sinn Féin for saying it would spend surplus exchequer receipts on housing, saying structural and capacity issues rather than capital allocations were constraining housing supply. He said Sinn Féin had a “focus on control” in their housing plan, published earlier this week, saying it wants “essentially to control every home that they’re going to give to people when it comes to selling their home”, saying the party was being “disingenuous” and “dishonest” in its statements.
Mr Chambers said the passenger cap on arrivals at Dublin Airport was a “serious risk to economic growth” and shows the “risk that’s in our economy on strategic infrastructure being delayed in our planning system”. He said he fully supported the lifting of the cap which was important for growth, connectivity, tourism “and so much more”.
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