Threshold: €200 'levy will be passed on to tenants'

Threshold, the national housing organisation, has criticised the levy of €200 that will be imposed on non-principal private residences, announced in today’s Budget, saying that the levy will be paid by tenants.

According to Aideen Hayden, chairperson of Threshold, there is a strong likelihood that landlords will pass the levy directly on to their tenants.

Ms Hayden: "Threshold is very concerned by the introduction of this levy, as we believe it will be passed directly on to those living in rented accommodation This will place even greater pressure on tenants who are already struggling to meet the costs of rent.

"There is currently an affordability crisis in the private rented sector for people on low incomes.

"Landlords under pressure to meet mortgage payments are seeking rent increases or higher-paying tenants. At the same time, tenants on low incomes are struggling because of reduced employment opportunities, rising living costs and increased competition for affordable rented accommodation.

"They will not be able to cope if this new €200 levy is passed on to them as well."

Ms. Hayden also pointed out that the State itself is responsible for the rents on 60,000 housing units in the private rented sector, making it liable for a bill of €12m when the new levy is introduced.

However, she welcomed the measures outlined in today’s Budget aimed at helping low-income earners to access mortgages and at simplifying the delivery of affordable homes.

Threshold pointed out that the overall housing budget is being decreased from €1.73bn this year to €1.65bn for 2009.

However, the organisation said it may still be possible for the Government to meet its social and affordable housing targets with the reduced amount of funding.

Ms Hayden said: "Because house prices are dropping, there is good value to be had at the moment. While the Government has reduced expenditure on housing by €0.08bn, if it invests this wisely - and makes sure that all amounts allocated to housing are effectively used - it should still be possible to meet agreed targets around the provision of social and affordable homes."

Threshold issued a warning to the Government not to use the social housing budget as a way of propping up the ailing construction industry, but to focus on quality housing in suitable areas for people in genuine need.

In relation to mortgage interest tax relief, Threshold said it regretted the increases in the relief were strongly focused on first-time buyers.

"While we are fully aware that first-time buyers need specific supports, we also deal with large numbers of families who are currently living in unsuitable accommodation and need to move on," said Aideen Hayden.

"Increasing mortgage interest relief for people in this situation is also important."

Threshold expressed regret at the announcement that the Combat Poverty Agency is to be subsumed into the Office for Social Inclusion within the Department of Social and Family Affairs, and said this signalled the end of the agency’s independent status.