Paschal Donohoe (Dublin Central, Fine Gael)
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I thank the Deputy. The previous tax relief in respect of rent paid was abolished in budget 2011 and is no longer available to those who commenced renting for the first time from 8 December 2010. This followed a recommendation in the 2009 report by the Commission on Taxation that rent relief should be discontinued. The view of this independent commission was that, in the same manner in which mortgage interest relief increases the cost of housing, rent relief ran the risk of increasing the cost of private rented accommodation. Accordingly, the result of reintroducing this relief would be the risk of a transfer of Exchequer funding directly to landlords, which would not have the intended effect of reducing the pressure on tenants. In addition, a tax credit of this nature would be of little benefit to lower-income workers, the unemployed and students who may not receive the benefit of the relief as they may not be paying sufficient income tax. The Government has taken many different steps to address concerns about the cost of rental accommodation, including significantly increasing capital investment for the availability of more homes within our country.

Finally, at the time of its abolition, rental tax relief cost the Exchequer up to €97 million per annum and based on certain assumptions, it is likely that the annual cost of the Deputy’s proposal, if introduced, would be even higher. I listened carefully to what he said and accept that many tenants are under severe pressure because of increasing rents. I acknowledge the effect that has on their standard of living and on their concerns regarding the future and where they will live but that is why we have rent pressure zones, RPZs, in place under which we have capped the magnitude of rent increases that are planned. If we were to introduce a measure like this, there is a risk that rent increases would always be pressed right up against the cap on allowable increases in the RPZ in which a home is located. It is for these reasons that I am not in a position to accept the Deputy’s amendment.