Dáil Éireann Debate, Tuesday - 14 November 2017
112. Deputy Noel Grealish asked the Minister for Finance the reason he has ended the rent tax credit for persons that rent from private landlords; his plans to introduce other tax concessions for persons paying rent; and if he will make a statement on the matter. [47751/17]
Amharc ar fhreagraThe process to abolish the rent tax credit has been under way for many years. The Commission on Taxation reviewed the credit in 2009 and concluded that the net effect of the rent relief was to increase the cost of private rented accommodation, and as a result recommended that the rent relief should be discontinued. In Budget 2011, the process to abolish the credit was commenced on a phased basis. The credit was abolished for new entrants and the credit has been reducing annually for the remaining recipients (persons who were renting on 7 December 2010 and still meet the relevant criteria). The final stage in the phased reduction of the credit will complete on 31 December 2017, after which the credit will cease entirely.
I am very conscious of the difficulties that tenants are facing in the current rental market, but it is my view that the re-introduction of a tax credit would not be an appropriate tax measure at this time. By their nature, tax credits are of benefit only to individuals with sufficient taxable income to fully utilise them. Furthermore, demand-side supports of this nature can, as identified by the Commission on Taxation, become priced-in to the market, further increasing rental costs.
Instead, this Government has focussed on changes to the regulatory environment to support tenants. Many of these measures are outlined in the final report of the Working Group on the Tax and Fiscal Treatment of Landlords, which was published on my Department’s website on Budget day. These include the establishment of the Residential Tenancies Board to regulate the landlord-tenant relationship in order to protect both tenants and landlords; the introduction of improved minimum Buildings Regulations standards for rented accommodation; increased notice periods for both landlords and tenants; and the increase of rent review periods and the introduction of rent increase limits in Rent Pressure Zones.
The Deputy may also be aware of the ‘Strategy for the Rental Sector’ which was published by the Department of Housing in December 2016. My colleague the Minister for Housing, Planning & Local Government, Eoghan Murphy, T.D., would be able to provide the Deputy with further information on the measures contained in this report.
