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

In my budget address, I acknowledged the challenges that we face with regard to housing, and that it remains a top priority for Government. As part of the response, to assist renters, I announced an increase of the rent tax credit to €750. This is to assist those renters in the private rental sector with the affordability of their rent. The credit will continue to be available until the end of 2025.

Eligibility for the credit is also being extended to parents who pay for their student children’s rental accommodation in the case of rent-a-room accommodation, or so-called "digs". This change will apply retrospectively to the years 2022 and 2023. Previously, parents could only claim the credit in respect of their qualifying student children in the case of accommodation registered with the Residential Tenancies Board.

The rent tax credit is intended to provide assistance to those in the private rented residential sector pending further progress on the Government's Housing for All strategy. That strategy aims to deliver more homes of all types for people with different housing needs, including those who wish to rent at an affordable price.

The most recent Housing for All action plan update and quarter 3 progress report published by the Department of the Taoiseach demonstrates that housing supply is increasing and notes that the Government fully expects to meet its 2023 delivery target of 29,000 homes. Additional supply will help to moderate housing costs in both the purchase and rental sectors.

On making the tax credit refundable, as I noted earlier, the matter of refundable tax credits was examined as part of this year’s tax strategy group, TSG, process in advance of the budget, and the analysis and findings of the review were published in the income tax TSG paper, which is available on my Department's website.

In summary, the review noted that making tax credits refundable could lead to unintended consequences for labour supply, would be operationally and administratively complex, and would come with a significant cost.

I do not propose to accept the recommendations put forward, and if I can, I wish to outline to the House the up-to-date position. As of mid-November, we had almost 312,000 rent tax credit claims made by over 268,000 taxpayer units. As Senators know, a taxpayer unit can involve two people. That consisted of over 203,000 taxpayer units that made claims for 2022 alone, for example. The total cost of the rent credit claimed for the year 2022 is over €118 million in respect of PAYE taxpayers.As the Senator said, people have four years within which to make the claim. These numbers will now be updated, taking account of the claims made as part of the recent returns from the self-employed, self-assessed cohort in the income tax system.