Fergus O'Dowd
Question:122. Deputy Fergus O'Dowd asked the Minister for Finance his views on a matter (details supplied) regarding tax relief on social housing loans; and if he will make a statement on the matter. [16816/16]
View answerTuesday, 21 June 2016
Questions (122)
Written answers
Some of the details supplied in connection with this question are unclear. However, it would appear to refer primarily to a proposal to allow tax relief on the capital repayment element of a loan for new social housing.
The Deputy will be aware that I introduced a new tax relief in Finance Act 2015 which allows a full 100% mortgage interest deduction where a landlord undertakes, for a period of at least three years, to provide accommodation to tenants in receipt of social housing supports. This is in place of the 75% cap on mortgage interest relief deductibility which normally applies in respect of rented residential properties. The relief is designed to incentivise landlords to commit to letting their property to tenants in receipt of social housing supports over the longer term, thereby improving the stability of supply of property to such tenants.
This relief was one element of an overall package of measures designed by the Government aimed at stabilising rent and boosting supply in the housing market which, in my view, is the most appropriate and effective route to addressing rental price increases driven by supply constraints. To extend this relief further to allow for a deduction for the capital repayment element of a mortgage, as proposed in the Deputy's question, would in effect see the State fully subsidise the purchase by a private individual of a residential rental investment property. I do not believe that this would be an appropriate use of State resources at this time.
In relation to social housing, the Deputy will be aware that there are a number of non-tax commitments in the Programme for a Partnership Government, including a commitment to significantly increase and expedite the delivery of social housing units.