The Irish Property Owners Association (IPOA) has welcomed the clarification from the Minister for Finance that the Local Property Tax, due to apply from the summer, will be a tax deductible expense from rental income.
“At last, there is some tangible recognition for landlords, who are providing an essential service in housing 20% of people in Ireland (700,000)”, said Stephen Faughnan, chairman of the IPOA.
“However, we are concerned at the Minister’s suggestion that it will be introduced on a phased basis.”
Responding to a Parliamentary Question tabled by Deputy Finian McGrath (Independent, Dublin North-Central), the Minister said: “The Thornhill Group recommended that the Local Property Tax (LPT) paid in respect of a rented property should be deductible for income tax or corporation tax purposes, in a similar manner to commercial rates. This is not provided for in the Finance (Local Property Tax) Act 2012, but it is the intention of the Government to introduce such a provision on a phased basis.”
The IPOA have been campaigning for all local service charges to be tax deductible and have questioned why the LPT provision would not be introduced at the same time as the new tax.
“It makes no sense to say that an expense, which is clearly a business expense, should be delayed in being allowed against rental income,” said Mr. Faughnan.
“Landlords have already been penalised by the refusal of expense status for the Household Charge and the Non-Principal Private Residence Charge, not to mention the refusal of expense status for 25% of interest paid on borrowings. We hope the Minister will act speedily with this proposal.”