Wednesday, 27 April 2022
Department of Finance
79. To ask the Minister for Finance if he has considered implementing a scheme to counter the increase in rent to supplement those who are struggling due to the recent surge in the cost of living; and if he will make a statement on the matter. [21444/22]
As outlined in the 'Housing for All' strategy, the Government’s primary response to mitigating residential price inflation is to increase supply. The strategy outlines the plan to increase affordability and housing supply by 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. Additionally, in respect of properties in rent pressure zones, since 11 December 2021 annual rent increases are limited to 2 per cent per annum or the rate of inflation, whichever is lower.
With that said, as Minister for Finance I can only answer the Deputy's question in respect of taxation measures as any direct expenditure measures in this area are a matter in the first instance for the Minister for Housing, Local Government and Heritage.
Tax relief in respect of rent paid was previously available to those paying for private rented accommodation, including rent paid for flats, apartments or houses. It did not include rent paid to local authorities. This relief was abolished in Budget 2011 following a recommendation in the 2009 report by the Commission on Taxation. As such, it is no longer available to those that commenced renting for the first time from 08 December 2010.
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.
Having regard to the foregoing, I have no plans at present to reintroduce a tax-based support for those in private rental accommodation.