Joan Burton (Dublin West, Labour)

I move amendment No. 15:

In page 11, between lines 24 and 25, to insert the following:

"4.—No deduction, allowance or relief that would, but for this section, be allowed or available in computing profits or gains arising from rental income or in assessing liability to tax on that income shall be allowed or made available to a landlord of a tenancy, within the meaning of the Residential Tenancies Act 2004 and to which Part 7 of that Act applies, who has failed to comply with the requirements of that Part."

Nine years ago families who paid the 42% rate of tax usually could have aspired to owning their own homes. One of the consequences of the Celtic tiger is that for many families and for younger people, managing to buy a house is becoming more difficult. Yesterday I heard one of the Minister's cheerleaders, the chief economist from Bank of Ireland, say that the average cost of a house, or I should say a two bedroom apartment, in the Dublin area for first-time buyers is moving towards €400,000. Mortgage interest rates are inexorably rising and the European Central Bank has said they will rise on probably two occasions in the next year and a half, so the cost of mortgages is rising.

An extraordinary number of people are now renting. That is one of the statistics we do not hear from the Government. In the 1950s and until the mid-1960s, a reasonably moderate proportion of people lived in rented accommodation. The Minister may recall that in 1973, a Labour Party Minister, Jimmy Tully, from Meath brought in the right of council tenants to buy their own houses. Many of the landlord companies which operated in Dublin, Cork and other large cities also extended that right. For example, the Artisan Dwelling Company offered to sell a large number of its properties to its tenants.

However, after all the economic prosperity of the Government, more people are renting than at any time in the past 25 years. While some of the renters are migrant workers from other European countries and beyond, who may or may not stay here indefinitely, many of those renting are Irish. Traditionally, some of them might have got a local authority house to rent. As I said, in 1973 the Labour Party brought in the right of people to buy their council houses after a period of renting from a local authority. After approximately ten years, they could buy the house if they were in employment. Good solid social progress was made and I believe Fianna Fáil always supported the Labour Party in its position of giving renters the right to buy properties and have an aspiration to own their own houses. That is an aspiration probably shared by all the parties in this House.

Times, however, have changed under this Government. Many of our people are now renting and they will do so for a long time, if not forever. That brings us to the impact of renting on estates throughout the country. In my area of Dublin West, in some estates and developments, over one third of houses are rented. In some of the recent developments, some of these property millionaires queued up and brought 30 to 40 properties off the plans because, given that they have so much accumulated by way of rent allowances, they must buy more properties to maintain the benefit of their tax allowances.

The amendments propose that people who have these advantages fully comply with the Residential Tenancies Act 2004, that they are not granted tax allowances in respect of rent unless they are in compliance and that they furnish the Revenue Commissioners with sufficient information to show they have complied with all the requirements of the law in regard to registering as a landlord.

I do not believe I am the only Member of this House who has had dreadful problems with the new Residential Tenancies Board. As I said, in some estates in my constituency, up to one third of houses are owned by landlords. Sometimes, in the case of apartment developments, up to 50% are owned by landlords. Some of those landlords have absolutely no sense of responsibility to the tenants living in their houses or, more particularly, to other people in the complex, development or estate who have bought their own homes. The properties are in a disgracefully state. No advice or information is provided for tenants on issues such as late night parties and loud noise. When residents in an area try to get information about these landlords, they find they are not registered. We do not even know if they are registered for tax purposes.

In countries such as France, Italy and Spain, people often rent houses for generations, as happened here up to the 1960s. Being a landlord carried responsibilities. However, the Government has bred a new class of landlord who seems to know only profit and who churns tenants over at least once a year. As a result, a sustainable community is not being built up.

The Minister may say the proposals in these two amendments are very modest, which I acknowledge, but they are an attempt to use the tax laws to make these landlords in some way collectively socially responsible to other people who live in the estates in which they have invested. One must remember these landlords are investing for a profit. Many of them seem to have no sense of social responsibility. As I said, in other countries, there is a long tradition of letting properties and at times it is difficult to distinguish a rented premises from one which is owner-occupied. Anybody who goes canvassing can pick out the rented properties at a distance of 100 yd. because we have bred a landlord class who seem to have a diminished sense of responsibility to their community.

The Minister may say the provisions in the amendments are very modest but they are an attempt to use the provisions of tax law to put some smacht on these landlords so they have some social responsibility to the other people in the area in which they have bought their rented properties. If we could address this problem, we would have a much better regulated rental market. Perhaps down the road, we might return to what was, I thought, a fundamental value of Fianna Fáil that people might be encouraged to own their own properties and have a sense of pride.

Currently in Dublin West, the average rent is approximately €1,200 per month. With a property costing €400,000, one would not need to be a rocket scientist to work out that if one had the wherewithal to buy, one could buy as cheaply. However, people on the minimum wage cannot afford to get into that end of the property market. They cannot take the step up. My council in Fingal has been to the fore in producing affordable schemes but has nothing for this year. Those schemes have practically dried up. Part V was meant to provide a continuing throughput of social and affordable housing but the Minister's party welshed on that and allowed developers to pay cash instead. Cash is virtually useless because it is nowhere near the equivalent of the houses which should have been produced.

I commend this amendment. Landlords should not have things all their own way. If there is a technical way of improving the amendment I would accept that. Through the tax system we are developing a new landlord class. An ordinary family gets modest tax breaks on mortgage interest relief when buying a property. Given the structure of tax breaks which the Minister's party has introduced, the tax breaks for a landlord are typically worth five to seven times what they are worth to a family buying its own home to live in. That is another major inequity and unfairness in the way the Minister's predecessor in particular developed the tax system.

The Minister perhaps has an opportunity here for reform. It means turning his back on some of what the former Minister, Mr. McCreevy, did, but socially that is well worth doing.

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