A TAX CREDIT allowing renters to claim money back has been extended by the government as part of today’s Budget announcement, in spite of a report criticising the measure.

In the report published today by the Department of Finance, it claimed that the renters tax credit likely only tackles symptoms and not the “root cause of market dysfunction” in the private rental sector.

The measure allows renters to claim amounts worth up to €1,000 annually over the past two years.

It featured in the Programme for Government where it was stated that the measure would be increased progressively.

Finance Minister Paschal Donohoe has confirmed it will be extended for another three years, with renters able to receive up €1,000 annually.

But in today’s Department of Finance report, it says that there is a “lack of targeted beneficiaries” from the credit, with a significant exchequer cost further raising concerns for officials.

It’s estimated to cost €350 million for both last year and this year, which would make the renters credit one of the top ten costing tax expenditures for this year.

The department argued that making the credit “more generous would only represent an additional benefit” for wealthier households.

Because of this, officials believe the policy aims to “address the symptoms but not the root causes of the rental market crisis”.

The credit was initially worth €500 when it was introduced in 2022, but was doubled and backdated for anyone who hadn’t claimed the initial credit.

Housing Minister James Browne told The Journal today that he expects to see a progressive movement in the tax credit over the next couple of years. 

He also confirmed that the government’s new Housing for All plan will be published within the next three weeks “at the latest”. 

With reporting by Christina Finn