Stephen Donnelly (Wicklow, Social Democrats) | Oireachtas source

I thank the Minister for his response. I cannot see the unintended consequences. The idea of someone using the measure to rent out a string of properties does not hold up. This is a very simple idea. The idea is that if one owns a home, rents it out and pays rent on another, one can offset one against the other. Let me put it at its simplest. Imagine two families living beside each other who decide to rent each other's homes from each other and pay each other €1,000 per month. Neither of the families would be better off. There would be no more money going in to either. I am using a closed example. There would be no extra money going in but a €10,000 tax bill would be incurred by the families. It just does not make any sense. Where somebody deriving rental income from a property he or she has purchased purchases another rental property, the measure would apply to only one. Critically, the offset would apply only to the amount of rent one is paying oneself. The idea that one could achieve considerable tax deductibility just does not hold up.

I accept that the amendment, as I have tabled it, may not be correct. I have no doubt that there are holes in it. However, it should be reasonably straightforward to legislate for this, with the policy objective ordaining that if one rents out a premises that one owns and pays rent somewhere else, one is not going to get taxed on the double. What is occurring is double taxation.

In addition to the concept of helping accidental landlords, and the people Deputy Michael D'Arcy spoke about, there is a genuine labour mobility issue. If one lives in a house that one owns in Dublin but must move to Galway to work for three years, one will want to rent out the house in Dublin and rent a place in Galway. It does not seem reasonable that one should be taxed €5,000 for doing so. I am more than happy to look into this. I would imagine that other jurisdictions have this well figured out. Having regard to policy, is the Minister amenable to the idea that this constitutes an unintended tax and that it has trapped people? Would what I propose not help many people?

I know people who have left the country over this. They are saying they cannot raise their children in their apartment and are not willing to avoid tax in the hope they are never found by the Revenue Commissioners. They literally do not have the €5,000 or €6,000 to pay the tax bill they would incur if they moved the children from an apartment to a small house in the suburbs. Since I know people who have left the country over this, it is not a marginal issue. For those it hits, it hits really hard. We are not talking about a tax bill of €500 or €1,000; we are talking about a tax bill of €5,000 or €6,000 at the end of the year based on very modest assumptions. I refer to normal market rent today. Would the Minister be able to give an example of where and how he believes the proposal would be abused if it were implemented?