Dáil Éireann Debate, Tuesday - 4 October 2022
238. Deputy Ged Nash asked the Minister for Finance the estimated cost of pre-letting expenses for landlords at the €5,000 cap in 2020, 2021 and those projected for 2022, respectively; and the rationale for the projected cost of €1 million in the first year, and €2 million in a full year are grounded on; and if he will make a statement on the matter. [48535/22]
View answerSection 97A TCA, introduced in Finance Act 2017, allows a deduction (capped at €5,000 per premises) from rental income for certain pre-letting expenditure on properties which have been vacant for at least 12 months and are subsequently let. To qualify, the expenditure must be incurred in the 12 months immediately prior to the letting.
As the Deputy is aware, in Budget 2023, I indicated my intention to increase the expenditure cap for pre-letting expenses from €5,000 to €10,000 with effect from 1 January 2023. Additionally, the period for which a property must be vacant before being let will be halved from twelve months to six months.
At the time of preparation of Budget 2023, the year 2018 was the most recent year for which Revenue data were available in respect of the cost of the existing measure.
In the last few days, cost data relating to 2019 have become available. These indicate that in 2019 the tax cost has remained broadly of the same order (€0.8 million).
It is estimated that for 2023, the cost of the measure will be of the order of €1 million. This estimate allows for an increase in deductible expenditure of the order of 30% next year. The cost is expected to potentially double to €2 million in 2024.
