Emer Higgins (Dublin Mid West, Fine Gael)
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74. To ask the Minister for Finance his views on further tax breaks that could potentially be offered to landlords to keep them in the rental market. [11844/23]

Michael McGrath (Cork South Central, Fianna Fail)
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The exiting of small or accidental landlords from the private rental sector is a consequence of multiple factors, for example, the changing regulatory environment and the recent rise in house prices.

It is important to note that a wide array of tax reliefs and exemptions are already available for landlords and the property sector. The combined cost of these, in tax receipts forgone, is significant.

For landlords subject to income tax, the current position is that, after the deduction of allowable expenses, rental income is subject to tax as part of the total taxable income of the landlord. Individual landlords may therefore be subject to income tax at their marginal rate of tax in addition to which USC and PRSI will also apply. However, the Rent-a-Room relief allows a tax disregard for up to €14,000 rental income for an individual renting out a room or rooms in their own principal private residence.

Some examples of deductible expenses currently available to landlords include:

• the cost of maintenance, repairs, insurance and management of the property; property management fees;
• the cost of registering a residential tenancy with the Residential Tenancies Board; the cost of letting, such as letting agency fees; and the cost to the landlord of any goods provided or services rendered to a tenant;
• with effect from 1 January 2019, 100% of the interest on mortgages for residential rental properties may also be deducted;
• wear and tear allowances are available in respect of furniture, fixtures and fittings provided by a landlord. These allowances are granted at the rate of 12.5% per annum over a period of 8 years;
• owners of rental properties are also entitled to claim deductions of up to €10,000 against rental income from that premises for various expenses incurred prior to it being first let after a six-month period of non-occupancy; and
• Finance Act 2022 provided for the deduction of up to €10,000 in certain retrofitting expenses incurred by landlords on rented residential properties where tenants remain in situ.