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McGrath statement of tax changes for landlords. Same as last year. Will never happen.

DownByTheGarden

https://www.thejournal.ie/michael-mcgrath-landlord-tax-treatment-changes-6065356-May2023/

Im going to go out on a limb here and say that this is exactly the same as they did last year.

Make an announcement so that landlords wait for the budget and in the meantime lock them in some other way. Come budget day, not a bean for them.

Last year they were planning on extending the eviction ban but obviously got info from the AG that they couldnt do this.

And even if by some act of God they did bring in better tax changes for landlords there would be so many hoops to jump through to get them that hardly anyone would benefit. Either make the tax situation better or dont. Dont complicate it. And if you can talk about it, the same as they have been for over a year now, they can surely splel out what they are going to be at this point.

I call bullsh!t on it. And I think any landlords who are not out yet would be wise to get out while they can. This is just a ploy to keep them in for a few more months so they can come up with some new ban, maybe forever.

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Claw Hammer

The rela problem is not the politicians, it is the civil servants. they begrudge giving anything to landlords. During Covid landlords were thrown to the wolves, resulting in many selling up. I see no indication that situation is likely to change anytime soon.

pod6611

I completely agree. I have a rental property in another country. I have thought of selling it to buy an apartment in Dublin for when my kids go to college and rent it out in the meantime. But it is too risky. My concerns are not tax, rather the lack of protection against difficult tenants, the unfairness of how the rent control zones have been implemented, distrust of what current and future governments will do in this space and lastly how the word landlord is prefaced with greedy in this country. The whole thing is dysfunctional. I would be better off putting my money in a global equity mutual fund in the long run.

Mr Disco

Some gibberish in the indo today

https://m.independent.ie/irish-news/a-free-months-rent-for-the-average-renter-and-tax-cuts-for-mom-and-pop-landlords-housing-minister-darragh-obrien-lays-out-goals/a876243212.html

Grumpypants

Tax cuts tied to income. Prob be a 800 tax credit if your income is under 35k. So useless to anyone that is a landlord.

dennis72

I am a landlord in another country no tax no rtb no politician's meddling tons of competition place has to be desirable to have full occupancy all year no queues to rent

Was a LL in dublin, its a political football first came a 2 year rent freeze despite increased LL taxes, eviction bans, rent caps stupid long bureaucratic processes and no repercussions for someone who breaks up the place and or not pay rent.

Forcing LLs to stay seems to be the play, good luck with that one.

Mr Disco

https://m.independent.ie/irish-news/government-will-consider-including-landlords-in-14000-tax-free-rent-a-room-scheme-housing-minister-says/a1192323608.html

some kite flying

DownByTheGarden

https://www.boards.ie/discussion/comment/121020647#Comment_121020647

This is the absolute least they need to do. And they need to do it without lots of hoops for landlords to jump through. They already have to jump through far too many hoops as it is. Will this arrest the exodus of landlords, maybe some, but not all and it certainly wont even be enough to attract new landlords in.

[Deleted User]

There will be no supports for landlords, the government have been considering supports for landlords for the last 5 years but have failed to implement any. They throw something out in the press every year to make landlords that are on the fence about selling up consider staying in the rental business for a while longer.

FernandoTorres

I know there isn't a hope of this actually brought in but surely it'd be disastrous for first time buyers unless it's restricted to people who are already landlord's. There's €150bn in household deposits with banks earning nothing so you'd have wealthy people buying up huge amounts of lower cost properties for them and their kids to avail of this, thus driving up prices further in the lower band.

DubCount

The 14k exemption only applies up to the 14k level. At 14,001, the whole amount is taxable. This means any rent over 1166 PCM would be fully taxed. Landlords would face a risk if they reduce rents to hit this target as if the incentive is removed, it would set a new starting point for RPZ calculations.

o1s1n

https://www.boards.ie/discussion/comment/121021060#Comment_121021060

I don't see any mention of the whole lot suddenly becoming taxable if it goes a euro over the 14k, just that the 'first 14k' is tax free.

From that linked article:

'Currently, householders availing of the scheme can rent a room to someone but not pay tax on the first €14,000 in rental income.

This would mean no landlord would pay tax on the first €14,000 of rental income.'

Are you seeing somewhere else a mention of an 'all or nothing' type of thing where you cannot exceed 14k rent a year to avail of the potential scheme?

DownByTheGarden

https://www.boards.ie/discussion/comment/121020980#Comment_121020980

Dont worry. This is not nearly enough to bring anyone who isnt an idiot, reit, council or charity into buying properties to rent.

DubCount

https://www.boards.ie/discussion/comment/121021119#Comment_121021119

AFAIK the current rent a room scheme covers gross income up to 14,000. If you go over by 1 Euro, the whole amount becomes taxable. If they are saying they will extend the scheme to landlords as well, then I assume the same rules will apply. This may mean some landlords may have an incentive to reduce rent to the threshold, but then may get caught in RPZ. For many LLs (including those charging over 2k per month), it will have zero benefit. It might have more impact in rural areas where rents are lower.

FernandoTorres

If it was a 14k cap that would pretty much rule out all of Dublin which surely defeats the purpose? It would just mean everyone chasing an already limited supply in rural areas.

o1s1n

https://www.boards.ie/discussion/comment/121021448#Comment_121021448

Yeah I asked as that would be my situation exactly, if it's 'not 1 cent over 14k' then I'd need to reduce the rent substantially to avail of it - but would be absolutely boned if they then removed it as a tax break and I was stuck at a much lower rental income due to RPZs.

DownByTheGarden

https://www.boards.ie/discussion/comment/121021512#Comment_121021512

Wouldnt surprise me if their plan was some sort of trap alright.

MacDanger

Tax cuts for LLs is nonsense, a complete waste of taxpayers money; making it easier/faster for LLs to evict non-paying / overholding tenants is what's needed

DubCount

https://www.boards.ie/discussion/comment/121021583#Comment_121021583

Of course you are correct, but there are 2 problems with that.

1) The government have a vested interest in keeping the status quo. While someone is overholding, they are not in the homeless stats and the local authority dont have to find emergency accommodation for them. Its easier to let them stay in a private rental past their eviction period. What politician is going to vote for something that will increase homelessness in the short term and put more pressure on Local Authorities again in the short term.

2) Tax breaks sound like they are helping, so the government can say they are dealing with the issue. Whether it works or not is not the point. You'll get the usual statements that "this will encourage more small landlords into the market, and will even encourage some landlords to reduce rents to avail of this tax measure". Sounds great to Joe public and difficult for the opposition to attack. If no landlords take up the tax break because its useless - so much the better (it sounded good and cost very little).

In this case politics will outplay the real solution by some distance.

Fred Cryton

https://www.boards.ie/discussion/comment/121021583#Comment_121021583

Most of the country are similar to this guy...cannot understand the role of incentives to bring more landlords into the market. Only thinking about the direct cost involved. One-dimensional thinking.

Whats actually nonsense is a tax cut for tenants as it simply feeds back into the hands of the landlord through higher rents in the market.

Gumbo

https://www.boards.ie/discussion/comment/120599170#Comment_120599170

Not a chance as once you go over the 14k, the whole becomes taxable.

No LL can drop the rent to 1166 per month at the moment.

o1s1n

https://www.boards.ie/discussion/comment/121021583#Comment_121021583

I think we've gone round in circles on this one before...

Mr Disco

https://www.breakingnews.ie/ireland/landlords-must-commit-to-stay-in-sector-to-win-tax-breaks-says-mcgrath-1518639.html

DownByTheGarden

https://www.boards.ie/discussion/comment/121021583#Comment_121021583

We all know that will never happen though

DownByTheGarden

https://www.boards.ie/discussion/comment/121022828#Comment_121022828

And any landlord would have to be a total idiot to walk into that trap.

DownByTheGarden

https://www.boards.ie/discussion/comment/121023920#Comment_121023920

And there we have it. The first hurdle laid out in front of landlords to make this thing so difficult to comply with that nobody will end up getting it.

Imagine so much red tape and rules that its forcing landlords out and now they want to add even more of it.

Mr Disco

https://www.boards.ie/discussion/comment/121028676#Comment_121028676

Perhaps or perhaps not. May be a simple clawback post sale if sold 3/4 years after claiming the relief.

mrslancaster

https://www.boards.ie/discussion/comment/121023920#Comment_121023920

It's rubbish. They say they want to "stem the tide" of landlords leaving so they make statements about 'possible' budget changes to keep them in the market, and at the same time Simon Harris is bringing in new rules for anyone doing rent-a-room, possibly RTB registration or giving tenant status to licensees in a PPR. Imo that would cut that type of accommodation dead but they'll do it anyway and mess up that option also.

Can't see any tax cuts for landlords, there would be uproar from Marylou, Ivana, PBP et al about fat cat landlords.

Grumpypants

The only thing I'm holding out for is the tax free 14k. Even 12k would do me and I've no issue signing a long contract. Tenant has been there 8 years now and I've never gone above €1150 in rent despite the same home fetching €1500 now.

But it's harder and harder to justify scrapping by every year when there is potential to sell and clear a good chunk of debt.

Sierra Oscar

https://www.boards.ie/discussion/comment/121029243#Comment_121029243

It's looking like it will be a more straightforward tax relief up to X amount with a clawback of certain percentages if you sell within a certain number of years. There seems to be a pulling back from the idea of replicating the rent a room scheme, which is perhaps no major surpsise given it won't be of much use to many landlords in larger urban cities.

[Deleted User]

https://www.boards.ie/discussion/comment/120601026#Comment_120601026

25% rate of corporation tax on rental income.

12.5% applies only to trading income.