Mick Barry (Cork North Central, Solidarity) | Oireachtas source

In his budget speech yesterday, under the heading "Rental Sector", the Minister for Finance stated:

In the rental sector, I am bringing forward the full removal of the restriction on the amount of interest that may be deducted by landlords in respect of loans used to purchase, improve or repair their residential property. The rate was due to be 100% by 2021 but will now be effective from 1 January 2019.

This has a broad significance as a tax cut for landlords and is as good an example as any as to why this is a landlords' budget brought forward by a landlords' Government and presented to a landlords' Dáil. It also has a broad significance as the 100% tax relief will cost society €120 million per annum. We could build 700 houses on public land with such money. This change might also have more direct, immediate and serious consequences, and I will comment on those.

We know there are rent caps operating in designated rent pressure zones, and that cap currently stands at 4%. However, we also know there is a loophole in section 34(5) of the Planning and Development (Housing) and Residential Tenancies Act 2016 that allows landlords to circumnavigate the rent cap where there has been substantial refurbishment done to the property. This loophole has given rise to a number of scenarios. One scenario is where a landlord refurbishes a property and increases rent by above the 4% cap, such as by 10%, 20%, 30% or more, with the tenants forced to pay the increased rent. Another scenario is where the tenant is forced to vacate the premises either because the refurbishment works are so comprehensive or because the ensuing rent hikes are unaffordable to the tenant. This has become quite a trend in Irish society. According to Threshold, which knows a thing or two about this, the number three reason quoted on notices to quit for eviction in the middle of last year was "substantial refurbishment". A new word has already entered the lexicon, which is "renoviction", and there have been many "renovictions" over the past year. Given all this, the question must be asked in this debate as to whether the Minister has introduced a new tax break that will not merely incentivise refurbishment but will go further and serve to incentivise a fresh wave of rent increases above the 4% cap, along with a fresh wave of evictions or even "renovictions"? It is not in any sense scaremongering to suggest the Minister's tax break may well incentivise both rent hikes and evictions.

I note the tax break comes into effect at a time of year when evictions tend to peak. It is effective from 1 January 2019. Early in a new year after Christmas is precisely the time when evictions tend to peak. The tax break is intended to come into effect in fewer than 11 weeks. I strongly suggest this tax break should be scrapped or voted down. I equally strongly suggest that should Dáil Éireann decide not to vote it down, it would be a powerful reason for the emerging housing protest movement to escalate its efforts and mobilise its forces again this side of Christmas.

The budget speech also made reference to the establishment of the Land Development Agency. Rather than building 100% public housing on public land, the Government is setting up an agency to privatise public land in return for a minimum of 60% private development at market prices, with a maximum of 40% social and affordable homes. However, it should be pointed out that the Government seems to define "affordable" as being market price minus approximately €50,000, which in many areas equates to houses being sold for more than €300,000.

Earlier today I listened to the Taoiseach trying to take a swipe at county councillors who voted on Monday against the privatisation of council lands for such an arrangement, or actually an even worse arrangement, at Kilcarbery and The Grange in the South Dublin County Council area. Solidarity is proud that its three councillors on that council voted against that proposal. The site at Kilcarbery and the Grange is public land and public housing should be built there, perhaps divided into 60% council housing and 40% public affordable housing. Public affordable purchase schemes could deliver two-bedroom houses there for €180,000, as the costed plan formulated by colleagues in the area, including council colleagues, demonstrated earlier this year.

7 o’clock

Instead, thanks to Fianna Fáil, Fine Gael and the Labour Party, we will now get not 60% but 70% of houses at market rates - market rates that are unaffordable for a large number of ordinary working people. Perhaps up to 20% of houses will be at unaffordable so-called "affordable" rates while perhaps as little as 10% will be council houses. This vote on Monday night flew in the face of the wishes of a strong campaign waged by homeless women from that community who enjoyed wide support within that community. For this reason, the proposal was carried narrowly at the council by 20 votes to 16. It seems the Taoiseach has hitched his wagon to a privatisation agenda and an agenda of unaffordable market prices and no amount of bluff and bluster, such as we heard earlier, and finger pointing from the Taoiseach can hide those facts from view.

See this speech in context