Pre letting expenses regime doubled to €10,000

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Brendan Burgess

Brendan Burgess

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and reducing period of vacancy from 12 months to 6 months.

Is this significant?

Does it keep small landlords in the market?
 
Simply unbelievable. This is a weak attempt in my opinion to attract new landlords to the market and will do nothing to stop the exodus. Why would anyone buy an investment property in this climate and want to join this game is another question. Few landlords would have a vacancy of 6 months in this climate in any case.

It is a puzzling approach by the Government and another failed policy. Can't get my head around it as a result I will be serving notice in the coming weeks to my tenants.
 
How does it work?

If I buy a house with a view to letting it and spend €20,000 getting it ready, they are pre-letting expenses?

Now, I will be able to claim €10k of it as an expense vs. €5k in the past?

If I am an existing landlord I presume that the cost of redecoration between lettings is fully deductible?

Brendan
 
Brendan Burgess said:
How does it work?

If I buy a house with a view to letting it and spend €20,000 getting it ready, they are pre-letting expenses?

Now, I will be able to claim €10k of it as an expense vs. €5k in the past?

If I am an existing landlord I presume that the cost of redecoration between lettings is fully deductible?

Brendan
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Hi Brendan

Correct on all three counts.
 
I think it is just too politically unpalatable for the government to be seen to help landlords folks. It doesn't matter that the exodus of small landlords from the market is the main cause of rising homelessness and the government doesn't have the capacity to built or buy enough social housing to accommodate these households.
 
This does absolutely nothing for existing landlords. Tenants will be getting notice. Was waiting for the budget but they haven't done anything to encourage us to remain.
 
It seems a pity that after so much pre-budget hype on encouraging landlords they’ve effectively managed to highlight that small time landlords are really on their own. The allowable pre-letting expenses of €5,000 for a property that had been vacant for over 12 months was not used often as far as I’m aware. While the now €10,000 for a 6 month vacancy is an improvement, I can’t see it having any real impact. Tbh though I never imagined they’d give anything tangible to landlords in the current climate.

I doubt the general public really understand that small time landlords are just about breaking even after tax. If you’re an accidental landlord you’re probably still making a loss every month after tax, so selling the dreaded property is the only viable financial decision. If they’d given a €10,000 tax break to any current landlord that might have worked and in fact it would have been an incentive to get into the market.

We have a 2 tier landlord rental system where the small guy pays tax, but the big guys (reits, institutional investors) pay nothing. Seems like Ireland is upside down in property again.
 
They had a real chance to stop the exodus of landlords and instead threw a meaningless tax break at them that most cannot avail of.
 
This is just bizarre. At a min I thought the govt would tie a tax break into long leases.

Effectively we have received nothing from this budget.

Is there something coming that they felt they did not need to give landlords anything? Maybe you can only sell with tenants in situ?
 
The Horseman said:
This is just bizarre. At a min I thought the govt would tie a tax break into long leases.

Effectively we have received nothing from this budget.

Is there something coming that they felt they did not need to give landlords anything? Maybe you can only sell with tenants in situ?
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The possibility of a tax reduction linked to long leases was mooted, but assuming that there would be some difficulty in enforcing that, given that tenants may leave of their own accord.
 
i thought Michael McGraths comment about enticing and attracting landlords to come into the sector was hilarious and completely delusional in fairness. Tis getting the hell out of the sector is what people are trying to do!!!
 
PebbleBeach2020 said:
i thought Michael McGraths comment about enticing and attracting landlords to come into the sector was hilarious and completely delusional in fairness. Tis getting the hell out of the sector is what people are trying to do!!!
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If you read around academic articles on PRS right now there's a trend towards "shrinking" the PRS which to be honest, is what is happening here. There is a trend towards driving back towards social renting, cost rentals etc. The PRS isn't going to be promoted by anybody.
Think also the backlash against Robert Troy and other Oireachtas multiple property owners probably incinerated any chance of tax reliefs for landlords: they would have been seen politically as self-dealing. And to be fair, the perspective of many voters, especially voters stuck in the PRS, in some cases for decades, would be that it is unfair for landlords to be taxed less than other income earners on the same incomes. The tax commissions document said as such.
The elephant in the room is the SF government in waiting in the wings and the likelihood of a total rent freeze, eviction ban and ban on sales cannot be prevented by the current government. So no great point in giving landlords anything that was going to be wiped out entirely by these in a couple of years time.
 
lff12 said:
If you read around academic articles on PRS right now there's a trend towards "shrinking" the PRS which to be honest, is what is happening here. There is a trend towards driving back towards social renting, cost rentals etc. The PRS isn't going to be promoted by anybody.
Think also the backlash against Robert Troy and other Oireachtas multiple property owners probably incinerated any chance of tax reliefs for landlords: they would have been seen politically as self-dealing. And to be fair, the perspective of many voters, especially voters stuck in the PRS, in some cases for decades, would be that it is unfair for landlords to be taxed less than other income earners on the same incomes. The tax commissions document said as such.
The elephant in the room is the SF government in waiting in the wings and the likelihood of a total rent freeze, eviction ban and ban on sales cannot be prevented by the current government. So no great point in giving landlords anything that was going to be wiped out entirely by these in a couple of years time.
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I don't disagree with most of what you say here but the question shouldn't be why landlords aren't being taxed less than other income earners on the same incomes, but why they're being taxed more than other income earners on the same incomes.
 
Mocame said:
I think it is just too politically unpalatable for the government to be seen to help landlords folks. It doesn't matter that the exodus of small landlords from the market is the main cause of rising homelessness and the government doesn't have the capacity to built or buy enough social housing to accommodate these households.
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Our increasing population and the inability of the construction sector to deliver housing at the rate the market demands (for a myriad of reasons) is the main cause of rising homelessness. That and lots of people gaming the system to get a house, and sure why wouldn't they.
HyperionDayz said:
We have a 2 tier landlord rental system where the small guy pays tax, but the big guys (reits, institutional investors) pay nothing.
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There's always been a difference between how corporate and private income is taxed. I'm not anti-landlord but comparing the tax paid by a company to that paid by an individual is silly. That doesn't mean small landlords are taxed or treated fairly but that's a different argument.
 
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lff12 said:
The elephant in the room is the SF government in waiting in the wings and the likelihood of a total rent freeze, eviction ban and ban on sales cannot be prevented by the current government. So no great point in giving landlords anything that was going to be wiped out entirely by these in a couple of years time.
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Not sure I agree here, you are right about Sinn Fein but not taking action on trying to prevent landlords from leaving the market is irresponsible from a Governance perspective. Assuming Sinn Fein get into Government in two years time it would be two additional years of landlords leaving the market in mass and potentially two additional years of increased homelessness.....
 
Purple said:
Our increasing population and the inability of the construction sector to deliver housing at the rate the market demands (for a myriad of reasons) is the main cause of rising homelessness. That and lots of people gaming the system to get a house, and sure why wouldn't they.

There's always been a difference between how corporate and private income is taxed. I'm not anti-landlord but comparing the tax paid by a company to that paid by an individual is silly. That doesn't mean small landlords are taxed or treated fairly but that's a different argument.
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It has been suggested that the rent a room relief should have been extended to private landlords. We are in unprecedented times and a bit of imaginative thinking could have minimised the flight of landlords from the market.

I am beginning to think maybe the current govt know they wont be able to fix the housing crisis, they know Sinn Fein will be in power for the next election either on their own or in a coalition with smaller parties and they want to make an even bigger problem for Sinn Fein.

We are in for a bad time over the next two years with cost of living increases etc and maybe the govt feel they are in for a tough time no matter what they do.

The lack of anything of substance for the private landlord makes no sense whatsoever.
 
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