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Alternative Budget

Sinn Féin wants to give a tax break to all renters at a cost of €279 million

Giving tax relief to renters would cost €279 million.

TAX RELIEF FOR renters and three-year rent freeze is what Sinn Féin is calling for in its alternative budget this year.  

The latest rent index report from the Residential Tenancies Board published yesterday shows that the standardised national average rent is now over €1,200 per month. 

From April to June 2019, the standardised national rent was €1,202 per month, according to the RTB. That’s up from €1,123 one year earlier. 

The report is compiled in conjunction with the Economic and Social Research Institute (ESRI) and is based on 19,047 tenancies registered with the RTB in the same quarter. 

Sinn Fein’s housing spokesperson Eoin Ó Broin said an emergency freeze on rents for three years for all existing tenancies and new tenancies must be rolled out. 

In terms of the tax break for renters, Ó Broin said the refundable tax credit given to all renters would be equal to one month’s rent. Such a move is estimated to cost €279 million. 

The only way to give people a reduction in their rents is through a tax credit, said Ó Broin stating there are legal issues with dragging rents back to what they were a few years ago. 

He said people would either get a tax credit or if you are not paying sufficient tax, you would receive a refund from Revenue for the amount due. 

Ó Broin denies that it would deter investors into the market and states that the tax break would apply to everyone, as it would be too costly administer a means testing programme. 

Affordable rent 

Ó Broin said Housing Minister Eoghan Murphy has already stated that Ireland should embrace a rental society as is seen in other European cities, “but he’s going to charge people €1,200 euros plus for it”.

Last week, the minister said he believed that €1,200 rent was an affordable amount for two people to pay. 

In addition to a rent freeze and tax credits, Sinn Féin is also proposing to spend €394 million on an affordable rental homes. 

The party’s alternative budget, which will be launched next week, proposes that local authorities and approved housing bodies build 1,700 additional homes under the plan. 

The rent for these homes would be between €700-€900 per month. 

The cost estimate for this proposal comes in at €394 million. 

“The government has to start spending a significant amount of money, either building themselves directly, or getting approved housing bodies or co-housing initiatives to build blocks of apartments and some houses so that people can pay rent that at affordable prices,” he said.

He said the 1,700 homes would be a “start” and there would be an upward building trajectory in the years after.

While Sinn Féin’s alternative budget is fully costed by the Department of Finance, it is unlikely to be adopted by Taoiseach Leo Varadkar. 

When a similar idea was put to the Varadkar last year he said it was not a proposal Fine Gael would support.

“Rather than just giving income tax cuts to people who are renting, we are giving them to all workers because other people struggle with other bills.

“It’s not just people who are renting, there are also people who are struggling to pay their mortgage,” the Taoiseach said last December. 

“There are also people who are struggling to save their deposit and people who are struggling to pay childcare costs,” he said.

“And rather than just giving tax relief to one group which is the Sinn Féin proposal we’re going to give it to nearly everyone who’s working, over a million people.”

However, the promised tax cut the Taoiseach made last year is not likely to begin in the upcoming budget. 

At the Fine Gael Ard Fheis last year, Varadkar committed to increasing the point at which people pay the top rate of tax to €50,000 for a single person and €100,000 for a double-income couple. 

The Taoiseach proposed to raise the threshold by €2,500 each year over the next five years from its current level of €35,300, in the case of a single worker.

Varadkar has stated that it is not necessarily something that can be started in the forthcoming budget.

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