Paul McGrath (Westmeath, Fine Gael)

I move amendment No. 17:

In page 13, between lines 29 and 30, to insert the following:

"6.—As respects the year of assessment 2005 and subsequent years of assessment section 473 of the Principal Act is amended by substituting——

(a) '€5,080' for '€2,540',

(b) '€10,160' for '€5,080', and

(c) '€2,540' for '€1,270',

wherever same shall occur.".

This amendment also relates to private rented accommodation and takes the opposite approach. I seek the increase in the tax credits available to persons who are in private rented accommodation. The thresholds for tax relief for rented property are very low. The base rate is €1,270 per annum, which is very small when considered on a weekly basis. It is not a real incentive to tenants in private rented accommodation to avail of tax relief. The Revenue Commissioners estimate that approximately 40,000 properties are covered by way of seeking tax relief on private rented accommodation. The CSO indicates that in excess of 80,000 private rented accommodations exist in the country. Deputy Burton said the Private Residential Tenancies Board indicated the figure could be as high as 120,000.

The net effect is that many people in rented accommodation are not claiming their tax credits. If it were worthwhile for them to do so, they would do so. Having claimed them, the landlords would then be brought into the loop in terms of the Exchequer getting a clawback on the tax on the profits they make. I believe this provision would be self-funding. By defining the right level of tax credit for persons in private rented accommodation, it would have the net effect of bringing into the tax net considerably more landlords, who pay no tax on their rental income. I recently came across a person who owns 65 private rented dwellings in a provincial town. To keep track of all those properties alone would be phenomenal. I wonder whether all those properties are registered for tax purposes.

If the Minister approaches the matter from the point of view of the tenants and give them reasonable tax breaks on paying their rent, they will want to claim their tax relief with the knock-on effect of being a bonus for the Exchequer. Yesterday the Minister spoke about low rates of tax that generate more activity. Increasing the benefit to the tenant as I have outlined would result in more registrations and more money into the coffers.

See this speech in context