Extended tax relief measures for landlords are being considered as part of next month’s budget in a bid to stop numbers leaving the sector.
A limited number of landlords availed of changes in the last budget which allowed them offset their rental tax liability against mortgage interest costs.
Finance Minister Michael Noonan raised the tax relief for landlords from 75% to 100% of the interest accruing on loans on properties leased for social housing purposes.
But landlords say that the extended relief is very restricted as it can only be claimed after three years and requires claimants to be registered with the PRTB.
It is understood that Finance Minister Michael Noonan briefed his Cabinet colleagues yesterday about options to extend this tax relief for landlords from 75% to 100% so that more landlords could avail of the option. The exact details of the proposed extended relief for landlords is still being worked on for October 11 budget.
Landlords say only a few hundred owners with properties availed of the extended measure this year after the budget. Simplifying the scheme and allowing more landlords offset their mortgage interest payments against their tax liability would help numbers remain in the sector, the Irish Property Owners Association told the Irish Examiner.
It could help “thousands of landlords”, suggested IPOA spokeswoman Margaret McCormick: “The big fear is if and when mortgage interest rates move, this will hit landlords, A move like this will protect the sector and also will help protect accommodation. Some 40,000 have already left the sector.”
The programme for government agreed to look at enhancing measures to boost the numbers of rented properties as well as ways to maintain tax relief for landlords.
It said: “We will maintain enhanced tax relief for landlords who accept rent supplement and HAP [Housing Assistance Payment] tenants. We will request the new Oireachtas Committee on Housing to examine other tax relief proposals designed to encourage a greater supply of private rented accommodation for tenancies supported by housing assistance, longer term leases and support more medium term emergency accommodation for homeless families.”
Meanwhile, the Irish Examiner understands that Mr Noonan is also likely to increase the point at which inheritance tax for children will begin to be charged.
Last year, Mr Noonan increased the threshold to €280,000 from €225,000, and sources said he mentioned a figure of €20,000 in terms of an increase this time.
This is part of a process to eventually raise the group A category, which are inheritances from parents to children, to €500,000 over several budgets.
However, Fianna Fáil want government to increase the thresholds for group B, which takes in other blood relatives including nieces and nephews, and group C, which covers those who are not blood relatives of those they inherit from.
Last year 33% of inheritance cases were in respect of nieces and nephews which currently have a threshold of €30,150 before they are subject to tax, while a further 23% related to the “strangers in blood” category that has a €15,075 threshold.
FF finance spokesman Michael McGrath previously said that leaving these two groups at the current thresholds would be “particularly unfair to people who do not have children but have relatives they wish to provide for”.
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