Mr. Cathal Lawlor:

I wish to address the question the Chairman raised in regard to long-term lettings. As an organisation, we have made presentations to Government and to Ministers on providing a tax incentive. I know the words "tax incentive" are dirty words for some but in order for people to change their habits, we must encourage and incentivise them to do so. Within that context, the Department of Finance introduced a tax relief on the long-term leasing of land in a review of the agricultural sector. The reason for that was that farmers who were letting land were invariably doing so on a one-year lease for fear that giving a longer lease would give the tenant some rights. On a general and casual basis across the length and breadth of Ireland, farmers had let their land on a one-year lease. In order to overcome that, the Department of Finance introduced a tax incentive to provide tax relief on rental income where a lease of land is entered into for a period in excess of five years.

As part of our previous submissions, we argued that a similar incentive should be brought in regarding residential property to encourage landlords to enter into long-term leases to give tenants the security of tenure they require. I believe that fits in with many of the points that have been raised by Deputies Eoin Ó Broin and Mick Wallace and some other Deputies. Even if a long-term lease was in place, disposal of the property would be subjected to that lease on the basis that it covered off over a period. In terms of giving the security of tenure a tenant requires and avoiding peaks and troughs in how the residency or tenancy is managed, it would help a lot.

With regard to some of the other points made by Deputies, there tends to be a feeling - whether it is right or wrong - that to invest in property is a very bad thing to do. Fundamentally, that might be right. I do not agree with it but I can see how somebody might have that view. What has happened is that the State has invited the private rental sector to provide rental accommodation. That has happened and that is just the way it is. We have to deal with the reality of the situation we are in. There is no point inviting people to provide property and then beating them up when they do. That is not going to achieve the end game.

From the landlords' point of view, we feel that the taxation treatment that has been applied since 2009, in particular, has been an impediment. This answers Deputy Coppinger's question around how it is that costs have increased. DKM Consultants, which is independent of the IPOA, found that costs have increased by 24%. One of the reasons for the increase is that we are not entitled to claim tax expenses in respect of 25% of the interest that we incur. In some circumstances, that can result in landlords getting taxed on losses. When there is a situation where anybody is getting taxed on losses, he or she is clearly not going to invest. Arguments around whether or not there are more or fewer landlords, or more or fewer units, in the market are futile because, fundamentally, fewer landlords are going to invest in a sector in which they are disincetivised from investing. It would be preferable for a landlord to invest in a commercial property where they are not disincentivised from investing. From our point of view, we argue that we must stop disincentivising landlords from investing and look at ways of incentivising them to invest. That might involve incentivising them to invest and provide properties that would be suitable to solving the homelessness crisis we have at present. If that was done in the context of long-term leasing, it might not be a bad way for the committee to start thinking.