Pearse Doherty (Donegal, Sinn Fein)
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135. To ask the Minister for Finance if he will consider immediate measures to support renters in the private rental market including the introduction of a refundable tax credit equivalent to one month’s rent; and if he will make a statement on the matter. [54426/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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In relation to the Deputy's question regarding measures to support renters in the private rental market, I can only answer in respect of taxation measures. Direct expenditure measures in this areas are a matter for the Minister for Housing, Local Government and Heritage.

The previous tax relief in respect of rent paid was abolished in Budget 2011 and it is no longer available to those that commenced renting for the first time from 8 December 2010. This followed a recommendation in the 2009 report by the Commission on Taxation that rent relief should be discontinued. The view of the independent Commission was that, in the same manner in which mortgage interest relief increases the cost of housing, rent relief increases the cost of private rented accommodation. Accordingly, the result of reintroducing this relief would very likely be a transfer of Exchequer funding directly to landlords, which would not have the intended effect of reducing the cost pressure on tenants.

At the time of its abolition, the rental tax relief cost the Exchequer up to €97m per annum, and it is likely that this figure would be even higher today were a similar scheme to be put in place. The refundable element mentioned by the Deputy would potentially add further to the cost.

Proposals for new tax incentive measures are assessed in accordance with my Department's Tax Expenditure Guidelines. These make clear that it is important that any policy proposal which involves tax expenditures should only occur in limited circumstances. In particular, they provide that a tax-based incentive should only be considered where it would be more efficient than a direct expenditure intervention.

Having regard to these considerations, the case for introducing a refundable tax credit as outlined by the Deputy is not a strong one from my Department's perspective.

Finally, and as the Deputy will be aware, the Government's 'Housing for All' plan is intended to deliver more homes of all types for people with different housing needs, including those who wish to rent at an affordable price. The Government has committed to, amongst other things, an average of 2,000 new ‘cost rental’ homes every year, with targets of rents being at least 25 per cent below market level, as well as a rent value freeze to 2024 by linking any increases in Rent Pressure Zones to inflation.