Acknowledging that the rental sector is disorganised, Ms O’Sullivan said private rents should be pegged to the cost of living, a suggestion that has drawn the wrath of the Irish Property Owners Association (IPOA).
Chairman Stephen Faughnan said: “Minister O’Sullivan appears to accept that Ireland is not like other countries in regard to the culture of renting, but she still would like to put a legislative noose on the free market.
“She drew a comparison with a number of countries, including Germany and France, which she said had an organised private rental sector. But the reality is that in Germany and France, taxation policies on rental income are much more benign than in Ireland.”
A survey by the International Union of Property Owners, to which IPOA is affiliated, showed that in France, rental income has tax rates of up to 45%, with the higher rate only kicking in where net profit is over €150,000 — compared to €32,800 in Ireland.
“Even Germany’s top rate of 45% does not come in until the net profit is €250,730,” Mr Faughnan said.
“An organised property sector, as suggested by the minister, requires a more benign government and revenue policy so that landlords are able to properly earn their living in the same way as any other business people.
“While the IPOA have reservations about a rent cap at this point in time, I am pleased that Minister O’Sullivan accepts the proposition that operating as a landlord is a business and should be treated as such in government tax policy.”
Mr Faughnan added: “Today’s landlord is not the same as yesterday’s. Most landlords act responsibly in their obligations to tenants and need to be treated fairly by the State.”