Prevent landlords from leaving the ‘critical’ market to deal with the housing crisis

Irish accountants say the government sees the private rental market as a source of tax rather than part of the solution to the housing crisis and has called for tax cuts for individual landlords.

The Consultative Committee of Accountancy Bodies-Ireland (CCAB-I), which represents more than 50,000 accountants, has called for write-offs for improvements to rental properties and wants property taxes to be allowed as a deduction from rental income.

In its pre-budget submission, CCAB-I said owners need support as they no longer consider it economical for them to continue in the market.

“Landlords are an essential feature of a fully functioning residential real estate market, however, in general, landlords consider it no longer economical for them to continue in the market,” said Cróna Clohisey, Head of taxation and public policies.

In the Irish tax system, business owners with rental property enjoy more favorable tax treatment, at 25%, while individuals face rates of 52% and above.

“The 25% rate should be extended to individuals to address some of the inequalities. By removing the disparities, the tax system could be effectively leveraged to encourage owners to stay in the market and new entrants to meet the supply shortage.

The representative body also said the 33% rate of capital gains tax (CGT) is too high and said tax relief should be available on disposal. of a rental property, provided the property is sold with an on-site tenant or a requirement that the property continue to be used as a rental property.

He said a reduction in CGT to 20% would also free up residential property in the real estate market for younger generations.

In addition to the reform of personal tax allowances, the CCAB-I supports the proposal to introduce a third income tax rate. He said that currently a worker in Ireland starts paying tax at their marginal rate once they have earned €36,800, which is below the average industrial wage.

“A third rate would make the tax system fairer provided the thresholds for entry into each tax bracket are appropriate.”

Comments are closed.