Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I move amendment No. 16:

In page 20, between lines 24 and 25, to insert the following: “Report on income tax relief

17.The Minister shall, within 6 months of the passing of this Act, prepare and lay before Dáil Éireann a report on an income tax relief equivalent in value to one month’s rent of an individual available to all renters not already in receipt of any State subsidy examining the social and economic impact of this measure in the context of high levels of rent.”.

This amendment is in the format we have to use, namely, "a report on an income tax relief equivalent in value to one month’s rent of an individual available to all renters not already in receipt of any State subsidy examining the social and economic impact of this measure in the context of high levels of rent". We are talking about high levels of rent and the Minister is well aware of the current figures from the RTB. The national average is €1,202 per month, with renters in Dublin seeing a significant increase and experiencing greater pressure as the level stands at €1,713 per month. These figures represent an annual increase of 7% and there is no sign that it is slowing down.

It can be seen that the cost of rent is outstripping wage growth for many renters, including young families and workers. I discussed some of the resultant impacts earlier. We can see the outcome, with people having become homeless in emergency accommodation, while others have moved back into their parents' homes. Many are at the pin of their collar in just trying to get through the week. The rental market is broken and we need to fix it. As we do so by increasing capacity, we must also ensure relief and a reprieve for renters. We are asking, therefore, for the introduction of rent relief equivalent to one month's rent for those renters not already receiving a State support.

Prior to my or the Minister's time, rent relief was introduced in 1982 through a finance Bill. It was introduced initially to alleviate the pressure of the high cost of rent for those aged over 65 years. In the following years it was extended to all age groups in society and available to everyone. In 2009 the Commission on Taxation argued that it was actually increasing the cost of private rented accommodation and recommended that it be discontinued. It was abolished in 2011 by the then Minister for Finance, the late Brian Lenihan. It was not abolished overnight but phased out. Many other property related reliefs were also, rightly, then on the chopping block. We all know about some of the property reliefs and how they contributed in no small part to the financial crash we suffered later. I refer to a budgetary perspective. The reliefs also led to some of the banking problems. Rent relief was not available to any first-time renter after 7 December 2010, which change was made in a finance Bill. However, it continued up to last year for those renters who were already in receipt of it. It was phased out over several years, between 2010 and 2018. However, in the previous year it was possible to obtain relief up to a figure of €400. It was available at a higher level in previous years.

The Minister is familiar with our position. We believe three things need to happen. The first is a rent freeze to deal with the concerns expressed in the report of the Commission on Taxation. It rightly pointed out that rent relief was leading to an increase in rental prices because landlords were pricing in the relief and passing on the cost to renters. The introduction of rent relief, therefore, has to coincide with a proper rent freeze, as we have seen in some jurisdictions recently. We also need the burden of rent to be lifted from renters. The third measure for which we are calling is a significant increase in capital investment in public housing, including cost rental units. One of the concerns of the Commission on Taxation about the rent relief measure introduced in 1982 was that it did not benefit those who did not have taxable income, including some students and others in the low income bracket. That is why we have argued a refundable tax credit or relief should be introduced. I have made my pitch now and think this change is warranted. It would affect about 250,000 renters and is badly needed.

It is ridiculous that people who could get a mortgage to buy the property they are renting would pay less per week or month than they pay in rent at present. The system is broken and annualised increases are only going in one direction. Something has to give. Up until now that has meant people giving up their rental accommodation. In some cases they have fallen into homelessness and emergency accommodation but, in more cases, people have ended up moving back in with their parents. This is not a far out proposal. It was done 1982 and up until 2017, people were getting rent relief. This is not a mad, radical Sinn Féin idea. What we are trying to do is take into account the concerns of the Commission on Taxation and address them through the refund while also introducing a rent freeze as a temporary measure. There is no point in introducing rent relief as a temporary measure unless we bring in a rent freeze and increase capacity. A significant increase in capacity should have the effect of reducing rents throughout the State but even with the right resources, that will take at least three years. That is why my party is arguing for this relief to be put in place for at least three years.