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'Demonised' landlords should get tax breaks if linked to better renters' rights, says Varadkar

A number of bodys have recommended changes to the tax treatment of landlords.

LAST UPDATE | Feb 23rd 2023, 4:22 PM

TAOISEACH LEO VARADKAR has said he’s in favour of better tax treatment for smaller landlords that linked to better tenancy rights for renters. 

Speaking to reporters in Drogheda in Louth this afternoon, Varadkar said the Government will announced in “the next week or two” whether the eviction ban will be extended or scrapped. 

A temporary eviction ban is in place since November and is due to expire at the end of March.

A recent report by the National Economic and Social Council (NESC) on the private rental sector in Ireland recommended an improvement in the tax treatment for landlords, with a case made to link such tax breaks to providing more secure tenancies. 

Focus Ireland and Chartered Accountants Ireland had today urged the same. 

When asked by The Journal if he is in favour of such a move, perhaps alongside the announcement of the future of the eviction ban, the Taoiseach said: 

“I think there has been a demonisation of landlords and small landlords in particular in Ireland. That hasn’t been helpful.

“Lots of people need to rent for lots of different reasons. And for that reason, we need landlords. The State is a landlord to providing social housing and cost rental institutions and also small landlords as well.

“I think it’s a good idea that we should improve the tax treatment of landlords, particularly small landlords to encourage them to stay in, to encourage them to come into the market,” he said.

‘Makes sense to me’

Varadkar said what the NESC report proposed “makes sense to me”, stating that any tax changes should be linked to better rights for renters, so that renters benefit as well.

However, he played down any suggestion that tax treatment changes could be made prior to the budget in autumn.

“I would be reluctant to do any major tax measure out of the context of the budget. Anything meaningful will cost a significant amount of money and I think doing that outside of a budget context would be unwise,” he said, adding that Budget 2024 is “not all that far away”.

He said changing the tax treatment for small landlords could be considered in that context.

Housing Minister Darragh O’Brien previously told The Journal that the tax treatment of small landlords has to be revisited.

He said that if landlords are going to remain in the market then the tax treatment would have be discussed again by Government.

Varadkar also stated prior to the budget last year that introducing some tax changes to encourage landlords to stay renting and stay in the market is a “good idea”, however, nothing materialised in Budget 2023.

Taoiseach sod turning drogheda 1 Leo Varadkar attends a sod turning event for Drogheda's Port Access Northern Cross Route.

Speaking about the Fine Gael parliamentary party meeting last night, Varadkar said he sought the views of his members on the eviction ban and whether it should be extended past March. 

“There was a diversity of views,” he said, adding “it’s not a black and white decision to extend or not to extend. There are other things at play as well”.

“We will make a decision, as I said in the Dáil within the next week or two, so that people know where they stand on the matter.

Varadkar was also questioned about yesterday’s slip up by Junior Housing Minister Kieran O’Donnell, whereby he failed to oppose a People Before Profit Bill on extending the eviction ban for 12 months.

What O’Donnell did “was just an error”, said Varadkar.

“He’s a new minister and he didn’t say the word oppose in time, but the rules are the rules and the Ceann Comhairle has to enforce the rules and he was right to do so. It means now that the bill goes to committee, but that’s likely to be superseded by the government’s own legislation in this regard,” said the Taoiseach.

During Leaders’ Questions, Tánaiste Michéal Martin was asked by Social Democrats TD Catherine Murphy to clarify whether the moratorium would be extended.

“I accept there is a balance of rights,” she told the Dáil.

“Those already in homelessness and those who are facing homelessness have to be seen as real people that are being failed and damaged, and that has to be factored into that balance of rights too.”

She said that if the eviction ban ended in March, due to high rents and a shortage of housing supply, “the floodgates on homelessness would really be opened”.

Martin responded: “If we extend it – and I don’t think you could extend it for a short term, because we need to be honest with the market. We need to be honest with those who are renting as well – what would the impact on that be on supply?

“Would it make it worse?

“Politically, the simple catchcry is ‘extend it’, ‘extend the ban and then worry about the consequences later’, or indeed, the consequences will be the government’s problem and the government’s fault.

“On the other hand, the eviction ban did work during the winter.

“Because of the crisis that was caused by the energy situation, (it) gave a very solid kind of legal basis to a winter emergency ban on evictions.”

He added: “We’re giving this very serious consideration from a policy point of view. I’m mindful of some of the negatives it could have on the wider sector.”

Martin said that the legislation underpinning the eviction ban provides for a staggered ending out to June, to ensure there is no “cliff edge” ending on 1 April.

Turning of the sod

Varadkar was in Louth for the turning of the sod of the first phase of the Drogheda Port Access and Northern Cross Route, which aims to provide better connectivity for North Drogheda and allow for thousands of homes to be built in the area.

Speaking about wider housing delivery, the Taoiseach said he was delighted that the Government exceeded its target for the number of new homes being built in Ireland in 2022. 

“I know we have a long way to go, I want to see rent stabilising, and if anything, coming down. I want to see more people becoming homeowners. I want see the number of people in emergency accommodation going down. When I see that happening I’ll be much happier and it is our objective this year to exceed the target,” he said.

Varadkar said he would like see 30,000 delivered this year.

“I can’t guarantee that’s going to happen but we will do everything we can. We’ll pull out all the stops to make that happen,” he said.

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