Auctioneers seek return of amended Section 23 tax incentives

Measure was criticised in the wake of the property crash

In their pre-budget submission, the Institute of Professional Auctioneers & Valuers (IPAV) said the relief would enable an investor to offset taxable rental income for buying a new property for rental purposes. File picture

Ireland's property auctioneers are urging the Government to re-instate Section 23 tax incentives to encourage investment in the market and increase the level of properties available for rent.

In their pre-budget submission, the Institute of Professional Auctioneers & Valuers (IPAV) said the relief would enable an investor to offset taxable rental income for buying a new property for rental purposes.

Under the previous Section 23 provision full rental relief was generally contingent upon the property being let for 10 years. It was available to individuals who purchased, built or refurbished a property and then rented it on the open market. 

It was a hugely successful measure, however, was criticized in the wake of the property crash. 

Pat Davitt, IPAV’s Chief Executive said improving the pace and scale of housing delivery is critical for citizens, for the economy and for social cohesion within our society.

“The severe shortage of homes is universally accepted but debated primarily in political and ideological terms without sufficient attention being paid to market realities of what actually works to deliver homes, and at affordable prices,” he said.

IPAV said that while the original Section 23 did go too far, with the parameters being far too wide, leading to unsuitable and inappropriate developments in many areas, the underlying principle was one of success, he said.

“Any fair analysis of the previous Section 23 tax incentive scheme would conclude that it was a resounding success in terms of stimulating building,” he said. 

“It could be again, with more tapering to ensure it delivers towards more specific needs,” Mr Davitt said.