SCSI welcomes extension of Help to Buy scheme – measure will give certainty to the development market
But modest tax relief measures unlikely to make landlords about to leave the market to reconsider exiting
“It’s not only about the money. The failure to address complex rental legislation and inefficient dispute resolution process is a missed opportunity”
Tuesday 10th October 2023: While the Society of Chartered Surveyors Ireland welcomed certain elements of Budget 2024 – such as the two-year extension and amendments of ‘Help-to-Buy’ scheme – it said the very modest tax relief measures introduced for landlords were unlikely to make any who had decided to leave the private rental market, reverse that decision.
The SCSI said the extension of Help-to-Buy scheme to the end of 2025 and the revision of it to ensure that people availing of the Local Authority Affordable Purchase Scheme can qualify for it were positives.
The Vice President of the SCSI, Kevin Hollingsworth, said that while the move to grant tax reliefs to tenants and landlords was a step in the right direction, more could have been done on the landlord side.
And he said the failure to introduce meaningful reforms for the rental sector would be seen as a missed opportunity.
“First of all the tax reliefs being introduced for landlords is for the 2024 tax year – so it’s not claimable until 2025 – whereas the tax credit for renters and their parents has been made retrospective for 2022 and 2023. We believe a similar timeframe would have had a greater impact from a landlords’ perspective. Also, in order to avail of the reliefs, landlords will be required to stay in the market until 2027.”
“Will this be enough to persuade landlords to stop leaving the market? It depends, our research shows low net returns are just one of the main reasons landlords are leaving the market. The other reasons landlords are leaving is because rental legislation is overly complex while dispute resolution can be costly and time consuming.
“To reverse this trend and increase the future rental stock, it is crucial to overhaul and simplify the Residential Tenancies Act and its subsequent amendments, to ensure that adequate support and effective regulations are in place. It is also critical that the RTB is given the necessary resources to effectively govern the sector. The Government has an opportunity to put in place rental market safeguards for landlords as well as tenants, which would bring more rental homes to the market. They need to build on these measures without delay, otherwise it will be a missed opportunity.”
Vacant House Tax
The SCSI said the increase in the vacant house tax from three times the Local Property Tax to five times the Local Property Tax may not bring many properties back into use but could impact 60,000 property owners.
Mr Hollingsworth said there were many reasons a property may be vacant.
“Properties can be vacant because they are under refurbishment, holiday homes, between lettings, etc. According to the National Geo Directory, the national residential vacancy rate dropped to 3.9% (81,712 units) in June 2023, the lowest figure recorded. We would like to see local authorities engaging at the public level to identify vacant units and at the state level to have an accurate source of vacancy and clear definition of same before tax measures are introduced at such a high rate.”
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Contact Kieran Garry