Michael Healy-Rae (Kerry South, Independent)
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47. To ask the Minister for Finance his views on a matter (details supplied) regarding tax liabilities for landlord property owners; and if he will make a statement on the matter. [17984/15]

Michael Healy-Rae (Kerry South, Independent)
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48. To ask the Minister for Finance his views on a matter (details supplied) regarding the private rental sector; and if he will make a statement on the matter. [17985/15]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 47 and 48 together.

The Deputy's questions relate to the tax treatment of landlords. I would highlight that income tax is charged under Schedule D of the Taxes Consolidation Act (TCA) 1997 in respect of a number of sources of income, including rent received by landlords (both individuals and companies) from property in the State.

In the case of rental activity, taxable income is the gross rent as reduced by a limited number of specified deductions as set out in section 97 (2) TCA 1997. The main deductible expenses are:

- any rent payable by the landlord in the case of a sub-lease;

- the cost to the landlord of any goods provided or services rendered to a tenant;

- the cost of maintenance, repairs, insurance and management of the property;

- the interest paid on borrowed money used to purchase, improve or repair the property (which, in the case of residential property, is restricted to 75% of the interest and is subject to compliance with PRTB registration requirements for all tenancies that existed in relation to the property in the relevant year); and

- payment of local authority rates.

In addition, wear and tear capital allowances are available in respect of the capital expenditure incurred on fixtures and fittings provided by a landlord for the purposes of furnishing rented residential accommodation. These allowances are granted at the rate of 12.5% per annum of the actual cost of the fixtures and fittings over a period of 8 years.

The effect of the deduction of allowable expenses from gross rent means that the amount of taxable rental income will often be substantially lower than the gross rent, and could, depending on individual circumstances, be nil.

The Government is monitoring the rental market closely and the overriding objective in relation to rents is to achieve stability and sustainability in the market for the benefit of tenants, landlords and society as a whole. Housing policy is a matter for the Department of Environment, and my officials have been in contact with officials in that department. Any tax proposals would be considered by the Government as part of the annual Budget and Finance Bill process.