Christina Finn reports from New York

THE SUGGESTION OF any pre-budget tax breaks for renters and landlords has been downplayed by Tánaiste Micheál Martin today.

There had been reports in The Irish Times this morning that renewed consideration was being given by Government for some measures to be rolled out before autumn, but when questioned on the matter today, the Tánaiste poured cold water over the idea.

As reported by The Journal in January, some in Cabinet had indicated that Budget 2024 is too far away and that tax changes may have to be made to prevent a mass exodus of small landlords from the rental market. 

Speaking in New York today, Martin said collective Cabinet responsibility “is an imperative in all of these things”.

“We said there would be a package in respect of the rental sector in the next budget – and that remains the position,” said the Tánaiste.

“Because there can’t be knee-jerk responses to the situation. Because any one measure could have unintended consequences, so it’s got to be fully fleshed through and the budget is the proper context for doing that,” he told reporters.

While the Finance Bill is making its way through the Houses, the Tánaiste said that specifically relates to the cost of living package Government announced.

‘Turned a corner’

“We have turned a corner in respect of house building and particularly in terms of the first home buyers,” he told the media.

The figures in the last quarter of 2022 and in the first month of January indicate that, he said, stating there has been “very significant numbers” around first-time buyers.

“I think up to 7,000 if not more in January alone applying for the help-to-buy scheme, 9,000 houses completed in the last quarter of 2022 and in January over 2,000 commencements, the highest since records began.

“All of that indicates that there is significant activity in the housing market and we have to build more faster. Supply is the key to resolving the range of issues in relation to housing. Because it is the number one priority, it’s the number one issue facing people in the country in Ireland and we’ve got to everything possible to increase supply,” said Martin. 

Cost-rental income threshold changes 

He also confirmed to reporters that increasing the income threshold for the cost rental model is under consideration. 

The cost-rental model means that the price of rent is equal to the cost of the build alone.

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Tenants are charged an amount that covers the cost of delivering, managing, and maintaining a home only. This means prices are not driven by market movements, making it more affordable, and there is no risk of the developer making a profit.

Currently the income threshold for cost-rental scheme is below €53,000 net household income, however, in recent days there have been reports that it could rise to €100,000.

Martin would not go into specifics but said “it is under consideration, particularly in the context of utilising the cost rental model, in terms of rental properties that are being sold”.

The Help-to-Buy scheme has seen the highest number of first-time buyers applying to that scheme, added Martin, highlighting that the First Home scheme is “doing particularly well”.

“But we have to do more. I acknowledge that. We went from 20,000 to 30,000 [new homes built]. We have to go up higher, but it does take time to built up the capacity to deliver that amount of houses, but that is the agenda and we will continually look at all measures we can take to improve housing supply,” said the Tánaiste.

“I think the more immediate prospect is rapid build housing, modern methods of construction, we need to do that more rapidly in the context of social housing and affordable housing and we’re working with local authorities on publicly-owned land,” he said, adding that legislation on the planning side was passed before Christmas to facilitate rapid-build social housing which he said “might give us the opportunity to increase the supply”.