Thursday, 17 November 2022
Department of Finance
156. To ask the Minister for Finance if landlords who are exempt from registering with the RTB due to falling under the Housing (Private Rented Dwellings) Acts of 1982 and 1983 will be able to avail of the tax incentive for retrofitting; and if he will make a statement on the matter. [57100/22]
As the Deputy will be aware, at Committee Stage of the Finance Bill 2022, I introduced a new section into the Bill to provide for a new tax incentive for small-scale landlords who undertake retrofitting works while the tenant remains in situ, which has the aim of attracting and retaining small-scale landlords in the private rental sector.
The provision is intended to provide for a deduction of certain retrofitting expenses incurred by landlords on rented residential properties in calculating their Case V rental profits. The expenses that qualify for deduction are those in respect of which the landlord has received a home energy grant from the Sustainable Energy Authority of Ireland (SEAI). It should be noted that the expenses incurred must be in respect of the period 1 January 2023 to 31 December 2025. Furthermore, the maximum amount of tax deduction that can be claimed is the lesser of the qualifying expenditure incurred or €10,000 and a landlord is only entitled to claim the relief on a maximum of two of his/her rental properties.
The deduction operates in the same manner as any other permitted rental deductions. However, unlike normal rental expenses, it will not be deducted for the year in which it is incurred. Instead, the deduction will be claimed against the rental income of the year following that in which the expense was incurred. For example, expenses incurred on retrofitting works in 2023 should be included in calculating rental profits for 2024 and may be claimed by a landlord on their income tax return for that year. As such, relief under this measure will be claimed for the first time in 2025, in respect of the 2024 tax year.
As matters stand, in order to qualify for the relief the landlord must be tax compliant, compliant with the 2004 Residential Tenancies Act and registered with the Residential Tenancies Board (RTB). As the Deputy points out certain landlords are exempt from registering with the RTB as their properties fall under the Housing (Private Rented Dwellings) Acts of 1982 and 1983. There may be a case to include such landlords within the scope of the relief and I have asked my officials to examine this issue further.
If appropriate, the necessary steps will be taken to address this matter in due course.