Stopping landlords leaving the market 'critical' to address housing crisis
'A reduction in CGT to 20% would also release residential property back into the property market for younger generations.'
Ireland's accountants say the Government sees the private rental market as a source of taxes rather than part of the solution to the housing crisis and has called for tax cuts for individual landlords.
The Consultative Committee of Accountancy Bodies-Ireland (CCAB-I) which represents more than 50,000 accountants, has called for capital allowances for upgrades to rental properties and wants property taxes to be allowed as a deduction against rental income.
In its pre-budget submission, CCAB-I said landlords need to be supported as they no longer consider it economical for them to continue in the market.
“Landlords are an essential feature of a fully functioning residential property market, however, in general, landlords consider it to be no longer economical for them to continue in the market," Cróna Clohisey, tax and public policy lead said.
“The 25% rate should be extended to individuals to address some of the inequity. By removing disparities, the tax system could be effectively harnessed to encourage landlords to stay in the market and new entrants to meet the supply shortage.”
The representative body also said the 33% rate of capital gains tax (CGT) is too high and said relief from the tax should be available on the disposal of a rental property, conditional on the property being sold with a tenant in situ or a requirement for the property to continue in use as a rental property.
It said a reduction in CGT to 20% would also release residential property back into the property market for younger generations.
In addition to reforming personal tax allowances, the CCAB-I supports the proposal to introduce a third rate of income tax. It said that presently, a worker in Ireland begins to pay tax at their marginal rate once they have earned €36,800, which is below the average industrial wage.
"A third rate would make the tax system more equitable provided that the entry levels to each band of tax are appropriate."
