Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

As the Senator will be aware, this change was proposed in an amendment during Report Stage of the Bill in Dáil Éireann. However, allow me to set out once again why I believe the introduction of such a relief is not appropriate.

On Report Stage in the Dáil, Deputy Pearse Doherty noted correctly that relief in respect of rent paid by private tenants was previously available. However, as I explained, it was abolished in budget 2011 and it is no longer available to those who commenced renting for the first time from 8 December 2010 onwards. This was on foot of 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 could increase the cost of private rented accommodation. Accordingly, the result of re-introducing this relief would be a transfer of Exchequer funding directly to landlords, which would not have the intended effect of reducing the pressure on tenants.

In fairness to the Senator's colleague, Deputy Doherty, he acknowledged this point and argued on Report Stage that the measure be accompanied by a rent freeze for the period that the proposed support is in place. In reply, I would argue that the evidence suggests that long-term rent controls can give rise to their own problems, including a reduced number of landlords being available to provide rental accommodation in the first place. There is the risk that we would see a reduction in the overall availability of properties to rent, making worse the fundamental lack of supply already in evidence.

As I said previously, it should also be noted that a tax credit of this nature will be of little benefit to lower income workers, the unemployed and students who may not receive the benefit of the relief as they may not be paying sufficient levels of income tax.