Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The Minister is sympathetic to this issue and I ask him to find a way of dealing with it. We are talking here about a relatively small number of couples who are in quite a horrendous situation. Let us be upfront and straight about it: they are victims of the property crash. The Minister will know them. I certainly know some of them. I had a couple in to me a few months ago who are living in a two-bedroom duplex apartment. They were considering renting that out and renting somewhere else, but when I took them through what that would mean for them, in terms of the taxation treatment of their rental income, the loss of mortgage interest relief on their existing principal private residence etc. they quickly realised it simply was not possible. What they had done previously was divide a boxroom into two bedrooms - the Minister can imagine what that looks like. The reality facing many such people is stark.

We already have differentiation in the tax code in relation to certain rental income. With the rent-a-room relief, for example, up to €14,000 of income is exempt.

The point must also be made that many of these borrowers face the prospect of never owning another home. That is the reality because some of them are still in negative equity and, under the Central Bank deposit rules, as the Minister will be aware, non-first-time buyers face a 20% deposit requirement. Even if they hang on in there until the negative equity is gone and they sell the unsuitable property, they face the prospect of coming up with a 20% deposit for the property which they would like to buy to meet their new family needs and it is just not possible. It is not a runner for the vast majority.

I would expect any measure like this to be very tightly controlled. We would need very strong anti-avoidance provisions. Deputy Donnelly has acknowledged the need to tighten up the amendment and work certainly needs to be done on it. As a party, we prepared a policy paper on this issue back in 2012 and it is an issue that needs to be addressed.

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