Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I will come back to it again on Report Stage. I can see many difficulties at present. I am not sure how extensive the problem is. We are getting submissions from landlords stating they cannot make a profit on rental accommodation and that they do not have a taxable income on rental accommodation. Tax liability is on the income, not on the total rent. There is a variety of costs that can be offset against profit, including the cost to the landlord of any goods provided or services rendered to a tenant and the costs of maintenance, repairs and insurance and the management of the property. Where the property is under management in an estate or apartment building, the annual management fee represents a cost. There are also the costs of registering a residential tenancy with the RTB and of letting, including letting agency fees. Wear-and-tear allowances are available in respect of expenditure incurred on furniture, fixtures and fittings provided by a landlord. These allowances are granted at the rate of 12.5% per annum for eight years. An individual may be allowed a deduction in respect of the interest paid on borrowed money used to purchase, improve or repair a premises, subject to certain restrictions. A landlord is entitled to claim a deduction of 100% of qualifying interest in respect of a rented commercial premises but, in general, only 75% is allowed. I have referred to this already.

I would like an example from the Deputy's experience. It seems to me that the potential for profit on renting a small apartment when one moves on to a bigger one is quite limited, especially when it is almost by definition that people in negative equity have very big mortgages and consequently have extensive interest payments to write off against any profit from the rental. I would like to see worked-out examples. I am disposed to being sympathetic if the Deputy can point a way forward for me.