# Any rumours will they tax landlords less than current full tax rate?



## dodo

Just curious as will be selling rented house in coming months. Just not worth the stress with more than 50% profit going to Government.


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## Groucho

Well, today's Business Post reports as follows:

_Tánaiste Leo Varadkar said that the government would examine “what we can do to reduce the speed at which landlords are leaving the sector” in the coming months. “I know it may not be popular to say so, but the truth is more and more landlords every day are just selling up and have decided that it’s easier to sell their property than to continue to rent it and we just need to reflect on that and see what we can do to improve things,” he said. _


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## Brendan Burgess

This is what the Tax Strategy Group published today 



			https://assets.gov.ie/231221/d698265c-ab80-40bb-aaae-790b50719289.pdf


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## dodo

Brendan Burgess said:


> This is what the Tax Strategy Group published today
> 
> 
> 
> https://assets.gov.ie/231221/d698265c-ab80-40bb-aaae-790b50719289.pdf


Read in detail,I would think about not selling if a few of these proposals were introduced in  Budget 23.


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## PebbleBeach2020

Which is most likely would you think? I think lpt as tax deductible and pre letting expenses are easy token gestures by government but will do nothing to stem the flow of landlords exiting. 

I think the 20% tax rate on rental income would be a game changer myself.


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## landlord

PebbleBeach2020 said:


> I think the 20% tax rate on rental income would be a game changer myself.


20% off your total net rental tax perhaps, those on 20% marginal tax would not benefit otherwise.


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## Sarenco

dodo said:


> Read in detail,I would think about not selling if a few of these proposals were introduced in Budget 23.


That's interesting.

I thought the proposals were pretty modest but I would be interested to know what stood out for you.


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## Gordon Gekko

landlord said:


> 20% off your total net rental tax perhaps, those on 20% marginal tax would not benefit otherwise.


As in “20% goes to 0%” as opposed to “20% goes to 16%”?

The marginal rate going from 52% to 44% (i.e. 20% of 40%) wouldn’t be enough in my view.

A 20% rate would though, maybe even a 30% rate.


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## dodo

Sarenco said:


> That's interesting.
> 
> I thought the proposals were pretty modest but I would be interested to know what stood out for you.


1. I pay full rate so end up about 50% so if that was a flat rate of 20% then that is huge savings, 

2. CGT Relief EG(4 per cent per annum)=20% relief when selling house for a profit

3.This medium-term measure would allow a tax deduction against rental income for an element of the capital cost of a property in the initial years of ownership of a residential rental unit, with a corresponding reduction in the base cost of the property on a future disposal for Capital Gains Tax (CGT) purposes.


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## Nordkapp

We’ll see what measures if any are brought in, there has been so many charges and changes in rental taxation over the last20 years than chapters in the tax code. Landlords need certainty and for an indefinite period of time


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## NoRegretsCoyote

Sarenco said:


> I thought the proposals were pretty modest but I would be interested to know what stood out for you.


I agree. The TSG paper makes clear that most potential policy changes wouldn't be material to most landlords. LPT deductibility, CGT exemptions, being able to offset rental losses against non-rental income, etc, aren't going to move the needle much.

The TSG paper takes the view that rental profits are income like any other. And that a separate tax regime for rental income would be a major structural change that can't be justified.

I think that there will be changes for landlords in the Budget, but mainly cosmetic.


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## PebbleBeach2020

NoRegretsCoyote said:


> I agree. The TSG paper makes clear that most potential policy changes wouldn't be material to most landlords. LPT deductibility, CGT exemptions, being able to offset rental losses against non-rental income, etc, aren't going to move the needle much.
> 
> The TSG paper takes the view that rental profits are income like any other. And that a separate tax regime for rental income would be a major structural change that can't be justified.
> 
> I think that there will be changes for landlords in the Budget, but mainly cosmetic.


If so, I think we will be looking at selling up by year end. The government need to make a change via the budget otherwise the exodus will continue and the problem get worse.


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## NoRegretsCoyote

NoRegretsCoyote said:


> I think that there will be changes for landlords in the Budget, but mainly cosmetic.


Irish Times reports the following pre-Budget discussions today:



> For landlords, a 2017 paper on tax treatment has now been “dusted down” and sources say a range of options are being considered, including *allowing the local property tax to be deducted from rental income as an expense and allowing a relief from capital gains tax after a property is bought with a tenant in place and retained as a rental property for five years.*


I don't think these changes would make a material difference to anyone deciding to enter or exit the landlord business.


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## Sarenco

NoRegretsCoyote said:


> I don't think these changes would make a material difference to anyone deciding to enter or exit the landlord business


Of course they wouldn't, those possible changes are trivial.

If your income can only rise by 2% per annum and your costs are rising by 10% per annum, it doesn't take a genius to work out that is not a viable long-term business.

Tweaking the tax code won't stem the exodus.


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## cremeegg

While it is dispiriting to see 50% of the profit going in tax that is not the issue for me or I suspect most landlords. 

International comparisons show that the cost of renting in Ireland is very high, the cost of buying housing (and so what a landlord selling can expect) is not as excessive. 

No landlord, I suspect is getting out because they can't make a profit.

The issue is regulation and the pitfalls of the RTB. In short it takes a long time to evict a non-paying tenant, and there is a fear that there will be restrictions on the freedom to sell.

For once its not all about money.


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## jfrank

cremeegg said:


> While it is dispiriting to see 50% of the profit going in tax that is not the issue for me or I suspect most landlords.
> 
> International comparisons show that the cost of renting in Ireland is very high, the cost of buying housing (and so what a landlord selling can expect) is not as excessive.
> 
> No landlord, I suspect is getting out because they can't make a profit.
> 
> The issue is regulation and the pitfalls of the RTB. In short it takes a long time to evict a non-paying tenant, and there is a fear that there will be restrictions on the freedom to sell.
> 
> For once its not all about money.


150% agreed


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## Firefly

cremeegg said:


> No landlord, I suspect is getting out because they can't make a profit.
> 
> The issue is regulation and the pitfalls of the RTB. In short it takes a long time to evict a non-paying tenant, and there is a fear that there will be restrictions on the freedom to sell.
> 
> For once its not all about money.


And it's also why so few are entering the market..


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## T McGibney

Firefly said:


> And it's also why so few are entering the market..


Exactly. It's often said about male pattern baldness that it's not your hair falling out that makes you bald, but the fact that new hair growth slows and eventually stops altogether. An apt analogy for this mess.


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## Bluefin

There's been very good arguments been put forward by many members on this site in relation to how other assets (equities) should be treated from a tax perspective  (dividends and potential gains).... Why should rentals be treated any different from equities? As far as I can see no landlord is in it for altruistic reasons! They are in for pure profit with the tenant paying their mortgage while the landlord pockets the gains...


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## T McGibney

Bluefin said:


> As far as I can see no landlord is in it for altruistic reasons! They are in for pure profit with the tenant paying their mortgage while the landlord pockets the gains...


An apt example of the sort of borderline-aggressive sentiment that continues to motivate landlords to get out of the rental business altogether. 

When they start talking of you as if you're a criminal, it's only a matter of time before they come for you and your property.


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## KOW

Bluefin said:


> There's been very good arguments been put forward by many members on this site in relation to how other assets (equities) should be treated from a tax perspective  (dividends and potential gains).... Why should rentals be treated any different from equities? As far as I can see no landlord is in it for altruistic reasons! They are in for pure profit with the tenant paying their mortgage while the landlord pockets the gains...


That really has been the attitude over the past number of years and the exact reason why small landlords are running like greyhounds.
Plus the fact you can have decent tenants for years and some cowboy decides not to pay the rent and stays on a freebie for the best part of 2 years. Not alone will you loose two years income. The property most likely will be left in rag order. Also your previous good tenants paying rent in full and on time counts for nothing when you average out rental income over several tear time frame.


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## BigBoots82

NoRegretsCoyote said:


> I agree. The TSG paper makes clear that most potential policy changes wouldn't be material to most landlords. LPT deductibility, CGT exemptions, being able to offset rental losses against non-rental income, etc, aren't going to move the needle much.
> 
> The TSG paper takes the view that rental profits are income like any other. And that a separate tax regime for rental income would be a major structural change that can't be justified.
> 
> I think that there will be changes for landlords in the Budget, but mainly cosmetic.


Hilarious that they say this and stand over rental income charged effectively at 40% in a company plus 55% when you take it out whereas trading income is 12.5% and 55% when taken out. Some other income must be more other income than others.


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## Bluefin

I'm in no way anti landlord.. I've rented from the age of 17 to 38 with only 2 bad experiences in that time which where both resolved without the need of external intervention.. 

A rental property is an asset first and foremost and should be treated no different to any other assets from a tax perspective. 

If the contention that work should be taxed less than capital taxes, then any income generated from rents or gains made from selling houses should not be treated any different to dividend income or gains made from equities.  Likewise if CAT/CGT /Inheritance tax is to increased as being argued on this site,  rent and gains from property should be taxed at the same level of these taxes. 

I can't understand how FG(M Noonan) introduced such favourable tax incentives for reits... Both should be treated equally. 

I think Brendans and Purples desire to advocate for the younger generations to develop a type of system to allow them to get some sort of foot on the property ladder is admirable and I hope it succeeds.


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## tomdublin

Disturbing that the government seems to be giving in to blackmail by the landlord lobby.  Rentier income should not attract lower taxes than income generated from working and contributing to society.


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## KOW

tomdublin said:


> Disturbing that the government seems to be giving in to blackmail by the landlord lobby.  Rentier income should not attract lower taxes than income generated from working and contributing to society.


Like comparing apples and oranges. If been a private landlord was so lucrative why are so many including myself leaving the pitch?
The risks/rewards been a private landlord  are discussed in many many posts on AAM.
The simple fact is small landlords and I am a landlord since 2002 find  the risks associated in todays world are just not worth it.
The figures involved do not stack up coupled with the other real risks have and will continue to see landlords exit.
Go onto Daft and look for rentals in Dublin. First rentals to appear wiill be commercial landlords with multiple listings owned by foreign funds paying a fraction of the tax of small landlords and most probably moving profits outside the country.
Tax on a rental is around 50%. If this was even reduced by a significant amount say 10% I still would not consider staying in the market. Variables such as bad tenants the Prtb and the government blowing with the wind are whats chasing small landlords from the pitch.


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## tomdublin

KOW said:


> foreign funds paying a fraction of the tax of small landlords


Agreed, investment funds should pay taxes.  I also agree that it should be easier for landlords to get rid of antisocial tenants.  Beyond that, measures such as a complete prohibition of short-term rentals and heavy tax punishments for empty properties should help incentivise landlords to stay in business.  Taxing income not derived from work less than income from employment simply isn't fair.  In effect it amounts to people who don't own property subsiding those who do.


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## MrViking

tomdublin said:


> Agreed, investment funds should pay taxes.  I also agree that it should be easier for landlords to get rid of antisocial tenants.  Beyond that, measures such as a complete prohibition of short-term rentals and heavy tax punishments for empty properties should help incentivise landlords to stay in business.  Taxing income not derived from work less than income from employment simply isn't fair.  In effect it amounts to people who don't own property subsiding those who do.


that perspective re equal taxation of income is a bit naive. It’s more complex than that. The government does not meddle in the labour market to the same degree. For example, there are no restrictions on the maximum wage or pay increase your employer can give you…..even if your colleagues doing the same job are paid twice as much. Employers can fire employees who take the p*ss a lot more easily than a landlord can remove a tenant who has decided to camp out in your property for free. An employee can reduce his income tax by paying AVCs and other deductions. A rental property is not taxed in a way which is consistent with the taxation of other businesses. The result of the government meddling, and shifting the balance of rights (with risk of a lot worse to come) has resulted in landlords making the right financial decision to exit now. Simple as that. Either the balance of rights and meddling gets rolled back, or taxation policy shifts to counteract and incentivise a few more landlords to remain in the market. That’s the story - full stop!


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## PebbleBeach2020

If allowing property tax as an expense is all the government give landlords in the budget, the exodus including myself will continue. 

There needs to be a significant reduction in tax on rental income for me to remain. And there needs to be a mapped out plan of steps in years to come to make it financially viable for small landlords to remain in the game.


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## T McGibney

PebbleBeach2020 said:


> If allowing property tax as an expense is all the government give landlords in the budget, the exodus including myself will continue.
> 
> There needs to be a significant reduction in tax on rental income for me to remain. And there needs to be a mapped out plan of steps in years to come to make it financially viable for small landlords to remain in the game.


There's not a hope in hell of that happening. To do so would be to admit to a massive policy failure that the State and political class wholly and unnecessarily  created.


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## Mocame

I think a basic point about private landlords is not understood by policy makers and many of the commentators on the housing market.  No one is obliged to provide you with a commercial service.  Just like local shopkeeper, hairdresser or mechanic, your local landlord is not obliged to provide you with a service.  If you make it unprofitable or unattractive in other ways for them to provide the service, they will stop providing the service.  Simple.


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## The Horseman

The Govt need to bite the bullet on this issue and the only way they can do this (and save face) is to give something of equal benefit to the renters. 

By trying to control a market (which is exactly what private rental is) the Govt have made the mess we are in. 

Look at the taxi industry as a case in point. Deregulation destroyed the industry. Fixed charges, obsolescence of vehicles after 9 yrs irrespective of condition and inability to attract new drivers. 

If the Govt continues on its current trajectory in the property sector without encouraging new entrants I expect an even further deterioration in the market going forward.


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## DK123

I agree Horseman.Beware government tinkering.Just look back over the years me thinks.


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## PebbleBeach2020

Mocame said:


> I think a basic point about private landlords is not understood by policy makers and many of the commentators on the housing market.  No one is obliged to provide you with a commercial service.  Just like local shopkeeper, hairdresser or mechanic, your local landlord is not obliged to provide you with a service.  If you make it unprofitable or unattractive in other ways for them to provide the service, they will stop providing the service.  Simple.


Exactly. Which is what's happening now. And will continue to happen.


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## PebbleBeach2020

T McGibney said:


> There's not a hope in hell of that happening. To do so would be to admit to a massive policy failure that the State and political class wholly and unnecessarily  created.


Better to do nothing so is it? And stick their head in the ground. And hope things change if their own accord.

What about extending the rent a room limit of €14000 tax free to landlords. If a landlord reduces rent to a little under €1200 a month, it's tax free.

I would reduce my rent immediately and benefit the tenants hugely. If they are realistic about reducing rents, something like this needs to happened.

It would be targeted solely to benefit "mom and pop" landlords too. And renters would benefit hugely too. It would also give certainty and might attract new small landlords into the game.

A €300,000 house renter for €14,000 a year would give a investor a nett return after tax (i.e. no tax) of 4.67%, which I would consider to be very attractive.


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## scati

Thats the best idea ive heard so far, so they won't do that.


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## Sconeandjam

PebbleBeach2020 said:


> Better to do nothing so is it? And stick their head in the ground. And hope things change if their own accord.
> 
> What about extending the rent a room limit of €14000 tax free to landlords. If a landlord reduces rent to a little under k €1200 a month, it's tax free.
> 
> I would reduce my rent immediately and benefit the tenants hugely. If they are realistic about reducing rents, something like this need to happened.
> 
> It would be targeted solely to benefit moms and pop landlords too. And renters would benefit hugely too. It would also give certainty and might attract new small landlords into the game. A €300,000 house renter for €14,000 a year would give a investor a nett return after tax (i.e. no tax) of 4.67% which I would consider very attractive.


Many of the existing landlords got stung with the rpz and many are already under the 14k so bringing the rent a room scheme for landlords may not make any difference.

Get rid of the indefinite tenancies. That was the nail in the coffin for many landlords.

Stop kite flying comments that landlord may be forced to sell with sitting tenants.

 I read the report and there was a survey sent to ONLY 50 landlords. They asked why they left and mostly the comments was they did not want to be a landlord anymore. I wonder did anyone here get asked to complete the survey and what was the multiple choice questions?
The Government are tinkering to much and making the situation worse.

One idea they gave on the report was rent for 5/7 years with a tenant in place and you can reduce your cgt by 4% per year. Too much if a risk. what happens when the 5/7 years are up? Tenant still here any may have nowhere to go. Property values go up and down and we do not know what will happen in the next few years.
This would not stop us selling.


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## Purple

We tax business profits and income differently. Just about every country does. The tax that commercial landlords pay on their rent is different from the tax private (non corporate) landlords pay on their income. That’s because the tax any commercial concern pays is different to private income. 
It’s certain the case that the reits should be taxed the same way as any other business but there is still a fundamental difference between them and private landlords. 


PebbleBeach2020 said:


> What about extending the rent a room limit of €14000 tax free to landlords


I like that idea. It doesn’t fundamentally change the tax system but it does effectively put a ceiling on most rents. I would be interested to see what it would cost the State in taxes foregone, when the net cost of HAPS in deducted.


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## Mocame

Surely letting a property for rent is a business?  So why isn't it taxed in the same as all other businesses?  If I am a self employed sweet shop owner I can deduct a lot more business expenses from my business income before it liable for tax than landlord can.  Why is this the case?


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## Purple

Mocame said:


> Surely letting a property for rent is a business?  So why isn't it taxed in the same as all other businesses?  If I am a self employed sweet shop owner I can deduct a lot more business expenses from my business income before it liable for tax than landlord can.  Why is this the case?


I agree. The same deductibles should be allowed. Income tax should not be charged on anything that can reasonably described as turnover.


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## Purple

I’ve been a homeowner, a landlord and a tenant all at the same time so I have a broad perspective on this subject, though I certainly don’t have expertise in any particular relevant area.


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## Mocame

I have also been a tenant, and a home owner and a landlord, albeit not at the same time.  I am no longer a landlord but when I was I always found it strange that I wasn't taxed on my 'profit' but rather on my turnover (ie the rent) minis a relatively limited number of allowable deductions.  For instance if I owned a sweetshop all works to my shop would be tax deductible, if I am a landlord pre letting expenses are not tax deductible, not are the capital costs of improvements to the dwelling.  Why?


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## T McGibney

PebbleBeach2020 said:


> Better to do nothing so is it? And stick their head in the ground. And hope things change if their own accord.


Where did I say that? 

I stand by my prediction.  The government (and its eventual successor) will do precisely as you describe, and for the reason I stated above.


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## PebbleBeach2020

T McGibney said:


> Where did I say that?
> 
> I stand by my prediction.  The government (and its eventual successor) will do precisely as you describe, and for the reason I stated above.


You have three postings, the one above, a comment re make baldness and another. I don't see what you are suggesting, can you explain to me please?

Maybe you are confusing threads with your own suggestions or opinion.


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## T McGibney

PebbleBeach2020 said:


> You have three postings, the one above, a comment re make baldness and another. I don't see what you are suggesting, can you explain to me please?


I'm puzzled why you need to ask. The OP asked, as per the title of this thread: "Any rumours will they tax landlords less than current full tax rate?" I've clearly given my opinion on the likelihood of this happening.



PebbleBeach2020 said:


> Maybe you are confusing threads with your own suggestions or opinion.


 if you suspect that any of my comments here or elsewhere are inappropriate, feel free to use the report function, instead of trying to badger me about them.


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## PebbleBeach2020

T McGibney said:


> Where did I say that?
> 
> I stand by my prediction.  The government (and its eventual successor) will do precisely as you describe, and for the reason I stated above.



sorry, but i thought you disagree with my posting and then here you say the government will do precisely as I've described. I just got lost by what you've said.


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## T McGibney

PebbleBeach2020 said:


> sorry, but i thought you disagree with my posting and then here you say *the government will do precisely as I've described.* I just got lost by what you've said.


Correct, viz.



PebbleBeach2020 said:


> Better to do nothing so is it? And* stick their head in the ground. And hope things change if their own accord.*


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## Towger

Is you owned a small sweet shop (or farm) you could avail of various CGT reliefs on disposal of the business.  Landlords get nothing.  Not that the government is going to give the same reliefs in the current climate.
The long term solution is the build more, so maybe the government will introduce more Section 23 Schemes.


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## Protocol

Surely if rent is taxed at a lower rate than other income, people/firms will have an incentive to declare more rental income than other income?

I can think of directors of firms who typically own the comm properties that their firms use, increasing the rents that they charge their businesses?


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## NoRegretsCoyote

cremeegg said:


> While it is dispiriting to see 50% of the profit going in tax that is not the issue for me or I suspect most landlords.
> 
> International comparisons show that the cost of renting in Ireland is very high, the cost of buying housing (and so what a landlord selling can expect) is not as excessive.
> 
> No landlord, I suspect is getting out because they can't make a profit.
> 
> The issue is regulation and the pitfalls of the RTB. In short it takes a long time to evict a non-paying tenant, and there is a fear that there will be restrictions on the freedom to sell.
> 
> For once its not all about money.


I disagree with this. 

The law has swung more in favour of the tenant when it comes to security of tenure but the RTB was always useless when it came to non-paying tenants, etc. If you are in the landlord business seriously and long term then not a huge amount has changed on the regulation side.

Compared to before there is a huge difference on *tax*. Here is the tax treatment of rental profits for someone with €50k income from their regular job in 2007 and today.


*2007**2022**Income tax*40%40%*Health levy+income levy (now USC)*4%8%*PRSI*0%4%*CGT on gains*20%33%*LPT on value of property*0%0.1% (approx)

So you have 8% more of your rental income taxed than before, you have a much higher tax on any capital gain, and you have an annual tax on the value of the property that cannot be offset against another tax. Add to that the practical unavailability of finance for buy-to-lets and the arithmetic for a landlord is just far worse than it was 15 years ago. 

Landlords are leaving the market for a few reasons, mainly because so many are out of negative equity. The problem is that so few new landlords are replacing them. There are two reasons for this. The first is the reluctance of banks to lend for BTLs, and there is not much the government can do about this. The second is the tax treatment of landlords which is of course fully in the gift of the government. 

Noonan's 2011 move to give a CGT exemption for a anyone who bought and held property for seven years really helped to put a floor on the property market, particularly on the commercial side. I think softer CGT treatment for the committed landlord again today would make a big difference. For example in Germany there is no CGT for a landlord who holds and lets a property for ten years before selling. I think this kind of policy would really help to get investors into the market. There is still a lot of investable funds out there and if people saw gains on property being taxed a lot lower than gains on other investments I think it would really attract them in.


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## Nordkapp

@NoRegretsCoyote, sensible analysis and point re CGT. 

Also, it seems ridiculous that rent a room has no tax floor of €14,000 while all income for a rental with more capital risk has USC, tax etc.


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## cremeegg

@NoRegretsCoyote, An excellent post.

I think you are absolutely correct with regard to CGT. Investors are more likely to put money in housing if they can exit on fair terms.

As regards the taxation of rental income although you are correct in the detail, the rental income from any given property today is approx. twice what it was in 2007. Paying 8% more in tax is not critical. Indeed, there may well be a connection between higher taxes and higher rents. If the landlords cost is higher he will seek more rent.

As regards the regulation not changing, I am not so sure. Fortunately I have never had to evict a tenant but I suspect that it would be more difficult today. Also the political background around regulation does matter. The trend is going against the landlord.


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## Mocame

Looks like the government is proposing extra tax reliefs for landlords in return for very long leases: 








						Landlords could be offered Budget tax breaks if they give long leases to tenants
					

Tenants are in line for a first of its kind tax credit on their monthly rent under measures being considered for the Budget later this month.




					www.independent.ie
				



Will that be enough to stem the exodus of landlords from the market?


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## Purple

Mocame said:


> Looks like the government is proposing extra tax reliefs for landlords in return for very long leases:
> 
> 
> 
> 
> 
> 
> 
> 
> Landlords could be offered Budget tax breaks if they give long leases to tenants
> 
> 
> Tenants are in line for a first of its kind tax credit on their monthly rent under measures being considered for the Budget later this month.
> 
> 
> 
> 
> www.independent.ie
> 
> 
> 
> 
> Will that be enough to stem the exodus of landlords from the market?


It should incentivise professional landlords, both big and small, to offer longer term leases. It won't do much for the amateurs who see it as an alternative pension fund, don't want to put the work in, and really shouldn't be landlords in the first place. In the longer term that will make for a more stable market. In the short term it won't do much.


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## NoRegretsCoyote

The story itself is a bit odd:



> The package being drawn up could also include extra tax reliefs for private landlords subject to strict conditions. One of these is expected to be that they commit to provide their property as a long-term let, meaning a tenant would have fixity of tenure.



Any landlord is de facto committing to a long-term let. After six months any tenancy automatically converts to a "Part 4" tenancy and can only be ended on specific named grounds such as serious renovation, landlord or a family member moving in, or intention to sell. The longer a tenant stays the longer the notice period, and after as little as a year a tenant needs to be given 6 months' notice. The grounds to end the tenancy on a "no reason" basis after six years are being phased out, and were seldom used anyway.



> When compared with other EU countries, Ireland has very few domestic properties available on five- or 10-year leases.



I would think that very few tenants in Ireland actually _want _a five- or ten-year lease. 

The RTB tenant survey of 2021 had a few interesting facts in this regard:

Just 14 % of tenants had been in the private rental sector for 11 years or more. The mean was five years and the median was just three years.
The median tenant had been in their property for just 2 years, the mean was 4 years. Just 6% of tenants had been in one property continuously for 11 years or more.
7% of private rented tenants actually own a property already!
Only 3% of tenants rate their experience as negative or very negative
Only 25% saw themselves as private renters in ten years' time, but as per the first bullet point in reality that turns out to be a lot lower
On the demand side renting is culturally something people do when they move for a job, suffer relationship breakdown, or when they're saving for a house. Obviously it's something that some people get stuck in long term but for all sorts of reasons if you want to settle in one place then you are much better off with a social tenancy or owning your own house. I could be wrong, but I don't see Ireland turning into Berlin any time soon where you have a large fraction of the population happy to rent privately very long term.

The big problem with private rental in Ireland is the cost. The median tenant pays 30% in net income in rent, the mean is 35%, and 27% of renters pay over 40% of net income in rent. I don't think that this is socially desirable by any means and a rental tax credit is probably no bad thing given the tax benefits of owner occupancy. Rent controls have their place over the short term too but the long term solution consists of only three things: supply, supply, and supply. 

Government policy has to be about nothing else other than getting new landlords into the market and ideally getting them to finance new builds. Sadly I don't see much more evidence of this.


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## Protocol

*
2007**2022**Income tax*40%40%*Health levy+income levy (now USC)*4%8%*PRSI*0%4%*CGT on gains*20%33%*LPT on value of property*0%0.1% (approx)


Does 8% USC not start after 70k approx?

Does the USC apply to gross rent or net rental profits?

Does PRSI apply to gross rent or net rental profits?


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## Purple

Protocol said:


> *
> 2007**2022**Income tax*40%40%*Health levy+income levy (now USC)*4%8%*PRSI*0%4%*CGT on gains*20%33%*LPT on value of property*0%0.1% (approx)
> 
> 
> Does 8% USC not start after 70k approx?
> 
> Does the USC apply to gross rent or net rental profits?
> 
> Does PRSI apply to gross rent or net rental profits?


It's charged on net rental income though capital allowances and rental losses brought forward are not deductible.
What is strange is that only 75% of mortgage interest is counted as a cost so the landlord pays income tax on 25% of that cost.

Pensioners who are Landlords are not charged the 4% PRSI.


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## AAAContributor

Purple said:


> What is strange is that only 75% of mortgage interest is counted as a cost so the landlord pays income tax on 25% of that cost.



The percentage relief for mortgage interest has moved from 75% to 100% I believe:






						What expenses are allowed?
					

This page outlines the expenses you can deduct from your taxable rental income




					www.revenue.ie


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## Purple

AAAContributor said:


> The percentage relief for mortgage interest has moved from 75% to 100% I believe:
> 
> 
> 
> 
> 
> 
> What expenses are allowed?
> 
> 
> This page outlines the expenses you can deduct from your taxable rental income
> 
> 
> 
> 
> www.revenue.ie


I stand corrected.


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## MrViking

I would be nervous as hell entering into a long term lease with a tenant……only for a new government (with Sinn Fein in the mix) to subsequently roll in and get rid of the ability to terminate leases when selling a rental property. I’d feel much safer knowing that I still have the flexibility to (give notice) terminate my leases if and when any such legislation starts to make its way through the Oireachtais. This will be my trigger for exiting, and I ain’t gonna do anything to limit my ability to take this action…..regardless of any tax incentive.


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## DannyBoyD

@MrViking Is your property in the UK?


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## Mocame

Today's Sunday Times reports that :

"It is expected that while both renters and landlords will be given tax credits, the benefit for landlords will be limited to those who are willing to offer their tenants security in five or ten-year leases".









						Budget to aid both renters and landlords
					

The taoiseach has promised a package of measures to benefit both landlords and renters in next Tuesday’s budget. Speaking in New York this weekend, Micheál Mart




					www.thetimes.co.uk


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## Knuttell

5 years too late and will not prove attractive to landlords if linked to long term leases. Why they cannot cut to 25% and introduce 25%  tax on large foreign investors (who pay no tax) is utterly beyond me.


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## Protocol

I think it would be impossible to have different rates of income tax on different types of income??

Too much chance of abuse??


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## jpd

Foreign investors do pay tax - why do you thikn they do not?


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## PebbleBeach2020

it's just crazy that one group who are landlords pay 50% plus in tax while another group who are landlords pay nothing. How is that fair? Imagine charging teachers 50% tax and charging Gardai no tax? Would people stand for that?

The exodus of landlords is going to continue and only accelerate further. I see this Budget as a final chance for the Government to stem the exodus either through a reduction in the taxation charged to small landlords or else doing something about RPZ in existence for the last 6 years. Landlords selling up are being vilified with headlines of 10% increases in rent each year when a huge number of them are stuck with rentals upto 40% below market price. Someone with a new rental charges the highest rent possible, say €2,000 a month, while the small landlord with one property the last 15 years, still has it rented out at say €1300 a month and can only increase it €26 a year.

They are taxed to the hilt by Government, vilified by the media and the Opposition threaten them with giving the tenant a lifetime right to remain in the house should they get into power in January 2025. Add in, interest raises rising dramatically, meaning the cost of repaying the mortgage is increasing very significantly and yet the rent cannot be increased by more than 2% and also, if the tenant decides to stop paying rent, it'll cost you thousands to evict them, the bones of two years to do so, and if the tenant trashes the house on leaving, then you have absolutely no recourse or compensation to repair the house.

And people believe the narrative that landlords are on the gravy train and wonder why on earth they are selling up and getting out. 12 months down the road, things are going to be a hell of a lot worse for renters in Ireland.


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## rob oyle

It's terrible that private landlords are paying tax rates in line with the general population and are getting out when property prices have moved ahead of even Celtic Tiger levels. What WILL they do with their accumulated wealth?!?


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## Protocol

Who are the landlords that don't pay tax?

Please be very specific in any answer.

Tax is paid on rents earned by REITs, as they must distribute rental profits to shareholders.


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## NoRegretsCoyote

Protocol said:


> Who are the landlords that don't pay tax?
> 
> Please be very specific in any answer.
> 
> Tax is paid on rents earned by REITs, as they must distribute rental profits to shareholders.


I think you're right.

If I'm not wrong 85% of REIT income must be distributed to shareholders. Then the shareholder taxed at their marginal rate.

I guess REITs are better able to make use of debt. But as far as I can tell the tax treatment is no more favourable than for amateur landlords.


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## newirishman

PebbleBeach2020 said:


> Landlords selling up are being vilified with headlines of 10% increases in rent each year when a huge number of them are stuck with rentals upto 40% below market price. Someone with a new rental charges the highest rent possible, say €2,000 a month, while the small landlord with one property the last 15 years, still has it rented out at say €1300 a month and can only increase it €26 a year.


I find this particular interesting. The RPZ's were being put in place to put a lid on the 'market rent' increases that were way ahead of salary increases, or inflation rates.

Couple points I guess: First, how did rents increase as much as they did, despite RPZ's in place? For me it reads like the legislation was by and large 'worked around'. There are a few threads even in this forum where ideas are being discussed on how to 'work around' the RPZ limits.
So the spirit of the legislation is clearly not working. Maybe we should lobby to link rent increases with CPI instead, as it is done in some other countries.

Second point: what exactly is the 'small landlord' complaining about? That less profit is being made compared to the neighbour that worked around rent increase limits? Quite a few complaints here are regarding the requirement to pay tax on rental income. So clearly, even 'small landlords' are still making a profit. What some of the 'small landlords' seem to have forgotten is that being a landlord is a business, and might even require putting in some hours, deal with tenants, etc. Some landlords even decide to not rent it out at all (anymore), so clearly don't want/need the money. If you don't like to work for it, sell the place. 

I find the notion of 'I demand that I can increase the rent from €1300 to €2000 because!' rather irritating, to be honest.

And yes, I am aware that it isn't black and white.


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## The Horseman

newirishman said:


> I find this particular interesting. The RPZ's were being put in place to put a lid on the 'market rent' increases that were way ahead of salary increases, or inflation rates.
> 
> Couple points I guess: First, how did rents increase as much as they did, despite RPZ's in place? For me it reads like the legislation was by and large 'worked around'. There are a few threads even in this forum where ideas are being discussed on how to 'work around' the RPZ limits.
> So the spirit of the legislation is clearly not working. Maybe we should lobby to link rent increases with CPI instead, as it is done in some other countries.
> 
> Second point: what exactly is the 'small landlord' complaining about? That less profit is being made compared to the neighbour that worked around rent increase limits? Quite a few complaints here are regarding the requirement to pay tax on rental income. So clearly, even 'small landlords' are still making a profit. What some of the 'small landlords' seem to have forgotten is that being a landlord is a business, and might even require putting in some hours, deal with tenants, etc. Some landlords even decide to not rent it out at all (anymore), so clearly don't want/need the money. If you don't like to work for it, sell the place.
> 
> I find the notion of 'I demand that I can increase the rent from €1300 to €2000 because!' rather irritating, to be honest.
> 
> And yes, I am aware that it isn't black and white.


With new rentals entering the market at higher rents then the average increases. 

What the general public seem to forget is that no business is forced to continue providing a service and not get paid. Ever try to evict a non paying tenant? 

Also a business is all about maximising profit. The market dictates price. The State nor tenants can't pick and choose those parts of the market that suits them and ignore those that don't. 

If Tuesdays offering to landlords is a tax break if they agree to extended leases I don't think this will be enough to have a significant reduction in landlords leaving the market. 

Maybe a tax break without any preconditions may keep some landlords planning to leave in the market.


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## PebbleBeach2020

It doesn't suit the government narrative to not vilify landlords or encourage them to remain in the market without strings attached. SF will give out that they are siding with wealthy landlords. SF won't have to worry about landlords by the time they get into power, thousands upon thousands of them will be gone by early 2025 anyway.

RPZ zones were temporary (a bit like the USC). What the RPZ zones do is protect existing tenants but crucify new tenants. Any new property for rental (and there aren't many) have the rent set to the maximum. Advertised for €2500 a month, if you get it, brilliant, if not, drop it to €2400 etc. Someone will take it eventually (or very very quickly given the market at the moment).

Existing landlords, who didn't raise rents for years due to having a good tenant, are left with charging the same tenant a fraction of same rent. I know landlords who haven't any interest in charging the maximum rent, I know I don't want to do so. But we are faced with rent 40% lower than our next door neighbour because they are new to the rental game whereas I'm not. I genuinely don't agree with that. If people actually believe that this isn't driving landlords out of the market, you are naive. 

If people don't think landlords are leaving because SF are saying that if they are in power after the next general election, that landlords will have to sell a property wiht the tenant in situ, you are naive. That's like saying, you can sell your property in the next 2 years to absolutely anyway or after that, you can only sell to someone who is a cash buyer (banks won't lend unless there's vacant possession) and who wants to be a landlord. What percentage of the market of house buyers is that.........1% or less???? Talk about annihilating the value of your asset in two years time.

What the situation is becoming is that only rentals will be managed by huge REITS and charging the maximum rent possible. Anyone charging 'below market' rent will be encouraged to leave (and re-enter the market if they want). I could sell my house for 300k and buy another house in the estate that wasn't a rental and go from charging €1300 a month to €2000 a month. The only winners are the government (stamp duty and increased income tax on rental income), solicitors and estate agents. The landlords will benefit when the cost of selling and re-buying are covered (probably 2-3 years) and the tenant gets absolutely screwed with rent increasing over 50%. How is that a system that works.

For me, I would suggest this, if market rent in an area is €2000 a month, for a landlord, any landlord who charges 25% lower than the market rent, their income tax payable on rental income be capped at 25%. In this instance, instead of a tenant paying €24,000 a year in rent, they are paying €18,000. They win. The landlord, assuming no expenses whatsoever (unlikely but for the sake of calculations) would receive €18,000 in rent instead of €24,000 but they would pay tax @ 25% on €18,000 leaving them with €13,500 nett as opposed to 52% on €24,000 leaving them with €11,520. The government instead of receiving €12,000 in income tax would only receive €4,500. You can see why the government don't want to do this, but will instead make some stupid proposal on Tuesday to reduce tax if landlords sign up for 10 year leases or else increase the tax write off on pre-letting expenses (which is so immaterial to the vast majority of landlords that it's totally pointless).

Instead of a tax credit for renters, "putting a months renter back in renters pockets" as SF like to shout about, the above would put 3.33 months rent back in renters pockets. Plus, the benefit for renters is three times greater than it is for landlords.

I would like a minister or official to say what they think the rental market in Ireland is going to look like in 3-5 years time. There aren't any small landlords coming in and renting a house for €1200 or €1400 a month. Its REITS charging €2,500 plus for 2 bed apartments and leaving the things idle and being able to afford to do so until someone is willing to pay it.


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## PebbleBeach2020

Protocol said:


> I think it would be impossible to have different rates of income tax on different types of income??
> 
> Too much chance of abuse??


It isn't really. Previously, rental income was capped at 40% and not liable for PRSI and USC. The government changed this overnight and meant the tax paid by landlords increased from 40% to 51 or 52%. As a result, rents needed to increase by approximately 22-24% for the landlords to be left in the same net position as before. Tenants lost out, taxman gained big time and no difference for landlords.


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## PebbleBeach2020

rob oyle said:


> It's terrible that private landlords are paying tax rates in line with the general population and are getting out when property prices have moved ahead of even Celtic Tiger levels. What WILL they do with their accumulated wealth?!?


they will sell up because of regulatory, over taxation, threats of SF taking power and restricting who they can sell their asset to.

Taxation is one issue, RPZ are another. There's no consistency. If I'm a commercial landlord and I rent my property to a cafe and that cafe sells a coffee for €3.00. They closed down and I rent out the property to another cafe. That cafe isn't restricted to charge €3.00 for the coffee, they can charge what they like. With a domestic property, you are restricted and if you sell to another landlord, they too are restricted. And they are restricted indefinitely until they leave the property idle for 2 years. What a ludicrous situation and environment to develop.


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## PebbleBeach2020

rob oyle said:


> It's terrible that private landlords are paying tax rates in line with the general population and are getting out when property prices have moved ahead of even Celtic Tiger levels. What WILL they do with their accumulated wealth?!?


I would love to hear your thoughts on the future of the rental sector in ireland? Have you hear there's a crisis this year for third level students unable to find accommodation? How do you think this will be resolved? Are you of hte SF persuasion that w just need to build 20,000 social houses a year for the next ten years and that'll solve it all?

Now, to find the thousands of builders, blocklayers, painters, plumbers, electricians, plasterers, architects, engineers etc who are currently not employed who will build these 20,000 houses a year...........I saw them around here somewhere!!!!


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## PebbleBeach2020

Protocol said:


> Who are the landlords that don't pay tax?
> 
> Please be very specific in any answer.
> 
> Tax is paid on rents earned by REITs, as they must distribute rental profits to shareholders.


REITs are companies who earn rental income from commercial or residential property. *They are generally exempt from Corporation Tax (CT) on income from their property rental business only*. Also they are generally exempt from chargeable gains made on the disposal of assets of their property rental business only.






						Real Estate Investment Trusts (REITs)
					

This page explains Real Estate Investment Trusts




					www.revenue.ie
				




Dividends paid by REITS to non-residents are not liable to tax here in Ireland. And its common for the REITS to be foreign owned. Kennedy Wilson, DWS, LRC Europe, Patrizia, Orange Capital Partners and Greystar. The six of them REITS are foreign owned (i.e. no tax whatsoever paid in Ireland) and they rent out approximately 8,000 properties. And they are the REITS off the top of my head!

You have Irelands biggest land IRES REIT, they have over 4,000 properties and any foreign shareholders of theirs (and there's a lot) they pay no tax in Ireland either.


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## PebbleBeach2020

NoRegretsCoyote said:


> I think you're right.
> 
> If I'm not wrong 85% of REIT income must be distributed to shareholders (on which 12.5% corporation tax is due). Then the shareholder taxed at their marginal rate.
> 
> I guess REITs are better able to make use of debt. But as far as I can tell the tax treatment is no more favourable than for amateur landlords.


shareholders are only taxed at their marginal rate if resident in Ireland. A lot of REITS and share in REITS are owned by foreign investors, hence, they pay nothing. Also, see my posting about about Corporate Tax as per the Revenue website.


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## PebbleBeach2020

newirishman said:


> I find this particular interesting. The RPZ's were being put in place to put a lid on the 'market rent' increases that were way ahead of salary increases, or inflation rates.
> 
> Couple points I guess: *First, how did rents increase as much as they did, despite RPZ's in place?* For me it reads like the legislation was by and large 'worked around'. There are a few threads even in this forum where ideas are being discussed on how to 'work around' the RPZ limits.
> So the spirit of the legislation is clearly not working. Maybe we should lobby to link rent increases with CPI instead, as it is done in some other countries.


Rents increased by 10 or 15% last year because the calculation is based on rentals registered with the Residential Tenancy Board (RTB). So you have existing rentals increasing by a maximum of 2% per annum, combined with a load of tenancies ending and the property being sold and new properties coming into the system as new rentals. 

The issue or problem is, it's invariably cheaper rentals leaving the sector (because of high prices maybe, or RPZ restrictions maybe, or something else maybe!) and being replaced (to a very small extent) by new properties charging the absolute maximum rent possible (as in REITS charging €2,500 for a 2 bed apartment in Dublin, compared to some small landlord selling a 2 bed apartment in Dublin because they were limited to rent of €1300 a month and restricted to increasing it by €26  a year for the next 10-20 years. That's why rents are increasing. OR at lesat the headline figure of rent. If you had a property to rent out tomorrow, wouldn't you try and get the very maximum rent for it because once you rent it out, you are forever limited to 2% annual increases thereafter?!!!


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## PebbleBeach2020

newirishman said:


> I find this particular interesting. The RPZ's were being put in place to put a lid on the 'market rent' increases that were way ahead of salary increases, or inflation rates.
> 
> Couple points I guess: First, how did rents increase as much as they did, despite RPZ's in place? For me it reads like the legislation was by and large 'worked around'. There are a few threads even in this forum where ideas are being discussed on how to 'work around' the RPZ limits.
> So the spirit of the legislation is clearly not working. *Maybe we should lobby to link rent increases with CPI instead, as it is done in some other countries.*


The issue is existing tenancies are 'stuck' charging way below market rent indefinitely. If CPI is increasing 10% per annum, your costs are increasing 10% are well. So you are in the same position as before re way below the rent you could be charging. And I'll reiterate, no interest in charging maximum rent, but a fairer rent for the property is what landlords should be entitled to do. Not required/forced to subsidise housing costs of others. Hence why they are now leaving in droves. Eviction notices up 100% from last year and going to get even worse again in the next 12 months. 

At the moment, inflation and costs are 8% higher, yet price increases are limited to a maximum of 2%. No such restrictions for basics like bread, milk, butter, electricity, gas, petrol etc. Why is housing the exception? And by consequence, why is housing in an absolute mess.


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## PebbleBeach2020

newirishman said:


> Second point: what exactly is the 'small landlord' complaining about? That less profit is being made compared to the neighbour that worked around rent increase limits? Quite a few complaints here are regarding the requirement to pay tax on rental income. So clearly, even 'small landlords' are still making a profit. What some of the 'small landlords' seem to have forgotten is that being a landlord is a business, and might even require putting in some hours, deal with tenants, etc. Some landlords even decide to not rent it out at all (anymore), so clearly don't want/need the money. If you don't like to work for it, sell the place.
> 
> I find the notion of 'I demand that I can increase the rent from €1300 to €2000 because!' rather irritating, to be honest.
> 
> And yes, I am aware that it isn't black and white.


Landlords are complaining about:

inflation at 8% yet ability to increase rents by 2%. 
being permantently restricted to charge upto 50% lower than market rent irrespective of changing tenants or a tenancy ending
inequality of taxation treatment for all landlords
inability to evict a tenant who refuses to pay for upto 2 years
inability to pursue a tenant who vandalises and destroys a property and walks away without penalty

neither I, nor other landlords I know want to charge market rent. I have outlined above in post number 71 a solution that would benefit renters three times as much as it would benefit landlords. It suits the narrative for the government, to have the blame apportioned on landlords, when in fact, the biggest winners from any rental are the government or the taxman themselves.


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## NoRegretsCoyote

PebbleBeach2020 said:


> shareholders are only taxed at their marginal rate if resident in Ireland. A lot of REITS and share in REITS are owned by foreign investors, hence, they pay nothing. Also, see my posting about about Corporate Tax as per the Revenue website.


Rental profits by non-resident private landlords are only taxed at 20% though.

Depending on residence of REIT shareholder they will of course pay tax on the REIT income.

The CGT exemption makes sense as the shareholder will be taxed anyway on the capital gain in the share price which should broadly track capital gains of the REIT's holdings.


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## Mocame

Sunday indo suggests supports for landlords wlll be even less than the Sunday Times suggested.  According to the former:

'It is unclear if landlords will be given a significant tax break at this point. The leaders are examining whether tax relief on pre-letting expenses could be extended'.

whereas a tax credit of €400 pa for renters will be introduced









						Budget 2023: €15 welfare hikes and €400 tax credit for renters at centre of last minute budget talks
					

Demands for a €400 tax credit for renters and a €15 increase on welfare rates are the main bones of contention as Coalition leaders seek to agree the final details of the Budget.




					www.independent.ie


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## Knuttell

If correct then at least they are true to form with absolutely no idea how to keep Landlords in the landlordin business.....juicing up preletting expenses isn't it, not by a long , long way.


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## imalwayshappy

For renters, there will be a new tax credit but the precise amount is not clear.
It is understood there may not be tax measures for landlords - something several backbenchers had called for.

The above from RTE also. This is a puzzling move if it proceeds. How can increasing pre letting expenses also convince landlords to stay in the market???? Beggers belief.


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## NoRegretsCoyote

I started a new thread on the question of whether private landlords pay more or less tax than institutional landlords.


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## imalwayshappy

NoRegretsCoyote said:


> I started a new thread on the question of whether private landlords pay more or less tax than institutional landlords.


Good thread and comparison. However might be a red herring in due course given there won't be many small landlords around to make use of it....


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## Knuttell

Now no mention whatsoever on tax cuts for landlords. Was actually hanging on to see what would come of it. I have too much exposure to property anyway so will look at reducing the number of properties I own by half.
It's not stacking up
Regs changing monthly 
Sinn Fein in the wings
Tax treatment 
Etc 
As a FG member it's sad to say that FG have made a pigs ear of it.


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## imalwayshappy

I'm curious to know what the logic is for this approach of not helping landlords? Political backlash maybe.

Genuinely, is it a case where they want small landlords out of the market? In addition, daft announced that property prices are stable at the moment, is this just driven by the excess properties from the mass exodus of landlords? A plaster on the wound which will be a short term fix.

I see also a vacant property tax is to be introduced. So if you are in a RPZ and need to leave the property vacant to get back to market rents you will probably be hit here also.


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## Knuttell

I understood that Revenue (seemingly) objected strongly to it and there appears to be a lot of strong anti tax reliefs articles in recent days also.

Who knows perhaps tomorrow we will find tax relief for landlords in the budget after all...let's wait and see.


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## PebbleBeach2020

There won't be. If they are giving renters a tax credit of €500 they certainly aren't going to give that or more to landlords to entice them to remain in the market place. And to be fair, €500 less tax a year won't encourage me to remain in the game. Time to start giving notice to tenants I'm afraid.


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## imalwayshappy

Double of pre letting expenses to 10k and a reduction of vacant time from before letting from 12 months to 6 months.

Disappointing.


----------

