Legality of Section 23 scrapping to be tested

PROPERTY owners are “facing bankruptcy” following the Government’s decision to scrap Section 23 relief and have said they will challenge the legality of the decision.

Section 23 provides tax relief for the capital expenditure incurred on the construction, refurbishment or conversion of rented residential accommodation in certain designated areas.

However, the Irish Property Owners Association (IPOA) is set to challenge the decision to abolish the measure, saying the Government brought in the incentive to encourage investment, but are now “fleecing” the people who purchased these properties. The IPOA said it was “bordering on the criminal” to change the terms of a contract after it has been signed and the monies paid.

It said property owners purchased Section 23 in good faith because of the section relief and now face bankruptcy and ruin.

The IPOA claimed it was “outrageous and scandalous” that the state encouraged the purchase of these properties and put the incentives in place and when they have been purchased these incentives have been withdrawn.

IPOA chairman Stephen Faughnan stated that an “all-out” effort will be made to challenge this situation.

“The measures introduced by the budget will cause dereliction in the future, not alone in the older properties, but in the newer unsold properties that stand as a monument to the lack of control on the incentives and of banks that capitalised on these incentives. The landlords of Ireland must stand united and fight this attack on their livelihood,” he said.