Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

The previous tax relief in respect of rent paid was abolished in budget 2011, and it is no longer available to those who commenced renting for the first time from 8 December 2010. That 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 increases the cost of private rented accommodation. Accordingly, the result of reintroducing this relief could be seen as a transfer of Exchequer funding directly to landlords, which would not have the intended effect of reducing the pressure on tenants.

In the normal course of events, a tax credit of this nature would be of little benefit to lower income workers, the unemployed and students who may have little or no income tax liability. However, I understand from the discussion on Committee Stage that Deputy Pearse Doherty is proposing that the relief be in the form of a refundable tax credit. An approach on the lines the Deputy suggests would represent a significant shift which could have major policy implications far beyond the question of financial support for rent costs. It would take us into the area of income and welfare supports, which is currently the primary responsibility of the Minister for Employment Affairs and Social Protection.

In addition, this proposal, if it was accepted as outlined by the Deputy, would entail a very significant investment by Revenue to provide for it. Likewise, it would involve substantial investment by employers and payroll systems providers to develop new systems and procedures to handle refundable tax credits.

For those reasons, this is not a development that I am willing to consider at this time. The actions that the Government proposes to take to address concerns about the cost of rental accommodation are set out in Rebuilding Ireland - Action Plan for Housing and Homelessness.

At the time of its abolition, the rental tax relief cost the Exchequer up to €97 million per annum, and it is likely that there would be an even higher cost were a similar scheme to be introduced. It would be higher again if it were on the basis of a refundable tax credit.

Deputy Michael McGrath asked about the extent to which the constitutional grounds may be breached. We are satisfied that we are at the limit of the constitutionality to which we can go in terms of rent caps and other measures.

I completely disagree with Deputy Pearse Doherty's view on the amount of money that was provided in budget 2019 for housing solutions. It is €2.6 billion. That is not tinkering around the edges. That is the most money that has been made available in any budget ever before for housing solutions.

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