THE IRISH PROPERTY Owners’ Association (IPOA) has said it is “shocked, disappointed and saddened” that no “meaningful” measures have been introduced in Budget 2023 to “prevent the exodus of landlords from the market”.
Landlords will benefit from the budget decision to double the amount of pre-letting expenses that can be claimed to €10,000 per premises.
The change will also see a reduction in the period for which a premises must be vacant from 12 to six months.
A rent credit of €500 for tenants for this year and next was announced as part of the budget measures today.
The association has said that the Government has “reneged on their responsibility to curtail the loss of valuable accommodation for tenants”.
IPOA Chair, Mary Conway said:
“No meaningful attempt has been made to prevent the exodus of landlords from the market in spite of the State not providing homes for people.
“Over the years the Irish Property Owners’ Association has outlined the causes of these much-needed investors leaving the market, taxation over 50%, needless compliance, rent control, the abolition of the affordable bed-sit, and complicated legislation.
“All this has caused and will continue to cause homelessness and a shortage of affordable accommodation.”
She said changing the tax treatment of landlords would have gone a long way towards encouraging landlords to remain in the sector and new entrants to invest.
Conway said that landlords are being pushed out of the market, adding that investment funds have been given vast taxation breaks to supply the market with upmarket expensive accommodation with traditional suppliers being priced out.
“The exodus of small investors is likely to increase, and it will have a significant detrimental impact on the sector,” she said.
Public Expenditure Minister Michael McGrath says he hopes landlords see the signal from the Govt that they want them to stay in the market pic.twitter.com/FY1KfnGVDZ
— Christina Finn (@christinafinn8) September 27, 2022
Clarie Neary, Director of Residential Lettings and Management at Savills Ireland said:
There is a significant undersupply of properties available to rent in Ireland – stemming from an exodus of private landlords from the market. While the increase of tax relief on pre-letting expenses is to be welcomed, it’s not enough to incentivise landlords to stay in, or return to the market and boost supply.
Speaking to reporters today, Public Expenditure Minister Michael McGrath said that policy decisions had to be made and “there are limited resources”.
“There is a limit to what you can do, you can’t do everything that you would like to do,” he said.
McGrath said he hoped that landlords would “take some comfort” that the Government is “sending a signal that we want them to stay”.
He said he hopes other will also look at the possibility of entering the market, stating that additional supports have been given on pre-letting expenses.
Finance Minister Paschal Donohoe tells @thejournal_ie that he believes a rent freeze would result in more landlords leaving the market which would in turn result in higher rents. pic.twitter.com/F9Q3LWfEEt
— Christina Finn (@christinafinn8) September 27, 2022
Finance Minister Paschal Donohoe told The Journal that a rent cap would only lead to more landlords leaving the private rental sector and lead to rents going up even higher.
“I know we need to do more for tenants, I know we need to support them in a really tough time,” said the minister.
However, he said a rent freeze would result in even more landlords selling up which would result in higher rents.
When asked about landlords looking to increase rents on the back of the rent credit announcement, he said landlords have to adhere to the regulations set out in the rent pressure zones.
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