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

I thank the Deputy. The Government is acutely aware of the difficulties in the housing market. As I have said on many occasions, the key problem is a lack of supply. This is why the Government is committed to increasing the supply of all types of homes, including social, affordable, rental and owner-occupier.

The Minister for Housing, Local Government and Heritage has primary responsibility for housing policy. As part of the Housing for All action plan update published last November, I understand that his Department will undertake a review of the private rental sector. I expect the review will take into account the significant regulatory changes over recent years and will ensure that our housing system provides an efficient, affordable, safe and secure framework for both landlords and tenants.

The exiting of small landlords from the private rental sector is a consequence of multiple factors. A changing regulatory environment which has been necessary to ensure a fair and effective residential rental sector that balances tenants' rights and landlords' responsibilities has resulted in a challenging compliance framework for some. The recent rise in house prices has also prompted some landlords to sell their rental properties. Fears of legitimate access to their properties without encumbrance arising from future policy decisions have been cited by others.

The changing interest rate environment also has a direct impact on many landlords and the decisions they are making. In the cases of landlords subject to income tax, rental income is part of the total taxable income of the landlord. Individual landlords may be subject to income tax at their marginal rate of tax, in addition to which USC and PRSI will also apply.

A range of tax-based measures is already in place to support private landlords. These measures include 100% mortgage interest relief, the new retrofitting allowance introduced in Finance Act 2022 and a number of other deductible expenses. For example, owners of rental properties are entitled to claim deductions of up to €10,000 against rental income from that premises for various expenses incurred prior to it being first let after a six-month period of non-occupancy.

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