Landlords should get €6,000 of their annual rental income tax-free as rent pressure zones prevent them from charging the market rate, it has been suggested.
The tax plan is one of the measures proposed to prevent the flight of landlords from the market. The Institute of Professional Auctioneers and Appraisers (IPAV) says the cost of using the incentive, which would cost the Treasury $3,000 per rental in lost tax revenue, is significantly less than the cost of rehousing.
Landlords must commit to keeping the property in the rental system for another three years.
The IPAV is also proposing that the government amend rent pressure zone (RPZ) rules to allow landlords to charge market rent where tenants move out of their own accord. It says this would encourage landlords to relet rather than sell properties and reduce the number of properties to rent.
Landlords must commit to keeping the property in the rental system for another three years.
It would also encourage better property maintenance, IPAV’s Rental Market Solutions report suggests. One of the initiatives proposed in the report is an annual tax-free credit of €6,000 in rental income or personal taxes for landlords whose rents are below the market rate resulting from rent pressure zone (RPZ) rules, which also increases the capital value of such properties can be reduced to 50% or more.
IPAV chief Pat Davitt said: “Dwindling supply and lack of property maintenance have been internationally recognized as negative results of rent controls.
“They are particularly acute due to the nature of the current RPZ regime in Ireland. The range of measures we are proposing are designed to mitigate the worst aspects of RPZ controls.”
The IPAV also wants the government to continue to pay the municipal part of the rent to landlords where HAP tenants no longer pay their part of the rent. “This should apply until the agreed rent is reinstated or until the landlord finds a new tenant,” it says. The aim is to put 25,000 vacant homes back on the rental market, to be handed over to local authorities over the next three years.
