Aideen Hayden (Labour) | Oireachtas source

I have a fair degree of sympathy for a number of the issues raised by Senator O'Brien.

I would like to highlight a couple of issues relating to the tax treatment of rented properties, which issues I also highlighted earlier in the context of the debate about the universal social charge. Many Members will be aware that I am very much in favour of rent regulation to protect tenants from unfair rent increases. I am also against unfair tax treatment of landlords because this destabilises the entire rental sector. An issue arises in the owners of rented properties not being treated like any other business in that they are not allowed to write-off costs which, if they were involved in a different business, they would be.

I would like to make two particular points. First, on the local property tax, ultimately it is neither fish nor fowl in that it is not in reality a local tax or a property tax. There is a need for clarification on this issue. Amounts paid for local services should be, if paid for by a landlord, tax deductible. There should also be clarity on who exactly, in the landlord-tenant relationship, is liable for the provision of services.

Another issue is that of management fees in the case of apartments. If we accept that the local property tax is for the provision of services, there needs to be recognition of the fact that people living in apartment blocks already pay for many of the services to be provided for others living close to them in other forms of housing such as a three bedroom semi-detached house. There is an element of unfairness in the way this is structured in that it does not take into account the fact that 78% of the properties built in Dublin between 2002 and 2007 were apartment developments. We have never really come to terms with how we treat apartment living. It is something of which we will have to be cognisant.

I am asking two things of the Minister of State. First, the recent DKM-ESRI report on the rented sector recommended a number of changes to the tax treatment of landlords and the rented property sector. This recommendation needs to be acted on and the whole issue of the tax treatment of the rented sector needs to be addressed in the context of an overall review of the sector generally. Second, we need to revisit the legislation on apartment developments and management costs in the context of their tax treatment.