Michael McGrath (Cork South Central, Fianna Fail)
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As the Deputy will be aware, taxes on capital including CGT ensure that taxation is not focused solely on income and that those who benefit from gains in the value of their assets are included within the tax net on an equitable basis. It is important that burden of taxation is shared appropriately across the range of different taxes.

While preparing this year’s Budget a range of options were considered when deciding on the appropriate actions to support the rental market. The policy intention is to encourage landlords to remain in the market, and income supports were considered the most appropriate way to achieve this as reductions in capital gains tax will only be available at the time of sale and would be unlikely to encourage landlords to remain in the market.

A reduction in CGT for landlords such as the one suggested by the Deputy will essentially increase the cost to the State of every property purchased by a local authority or approved housing body, by the amount of capital gains taxes foregone. This increased cost directly benefits the landlord, who may be leaving the rental sector completely, and has the potential for deadweight costs as landlords who intend to sell the property in any case would benefit from the relief. It could also reduce further the housing stock available for other purchasers and ultimately increase prices for all purchasers.

I would also note that there are already non-tax measures in place to support sales to tenants and to local authorities.