Should landlords be offered tax breaks to accept rent allowance tenants?

Should landlords be offered tax breaks to accept rent allowance tenants?

Landlords should be offered tax breaks to encourage them to accept rent allowance tenants.

That’s the view of property expert Karl Deeter, who said State intervention may be required to help people secure homes.

Due to the demand in the rental market at present it is difficult for those on lower incomes to compete when rent allowance is not accepted.

Homeless campaigner Fr Peter McVerry recently warned that less than 1% of landlords in Dublin now accept rent allowance tenants.

However, in an interview with The Irish Independent, Mr Deeter of Irish Mortgage Brokers said something needed to be done to change this.

“It would mean landlords would actually be rewarded for taking on rent allowance tenants who are currently being turned away from private rented accommodation.

“They’d have to comply with all conditions and sign up for a three-year lease. There’d be no losers, as far as I can see.”

  • Do you think this proposal would work?
  • Are you a rent allowance tenant struggling to find a place?
  • As a landlord would you be happy to receive tax breaks to take on a rent allowance tenant?

Have your say below…

There are 37 comments for this article
  1. click website at 10:16 am

    Good interesting debate. Won’t happen in this election though 🙂

  2. Alan Byrne at 6:01 pm

    As an investor !
    I think the residential investor should be given every possible tax break in order to provide good quality housing and security of tennancy for all tenants because of the following .
    landlords pay a minimum 63% of their rental income befoure they even pay back a mortage .
    They all pay paye prsi usc property tax house insurance letting agents fees management fees accountants fees ! All of the above just add up to a minimum if 63% of rental income if you were to take into account ongoing repairs and depreciation you would be up to an average of 76% of rental income ,with 60% buy to let properties having over 100% mortages they are at an investment loss but are caught in the negative equity trap , with 15% less than 100% mortages and 25% with no mortages ,it is quite clear that that 75% of all landlords are propping up their properties with
    extra taxed income hence there is no rush for additional landlords to come into the residential market !
    As the exchequer is the largest
    Benefactor of the rental market I think that they should take responsibility for the rental crisis and make if more attractive for landlords to come into the rental market and secure more property for
    Our tenants ! Because based on the current set up landlords are trying to exit the market as sales figures will prove .

    • Peter Grant at 2:23 pm

      Thanks Alan for your overview which is well expressed.

      Perhaps the wrong question has been asked here,
      The Question now should be who do we want to provide rental accommodation and who is to manage these properties.
      In the last four years the government has frustrated the supply of accommodation and also those who traditionally managed these properties.

      I. They blame the previous Government.

      2. They penalize small investors with taxation at source.

      3. They remove bedsits without providing an alternative.

      4. They stop ribbon development by restricting people from building in country areas
      without providing for reasonable alternatives.

      5. They reduce the volume of zoned land in all country towns without accounting for the fact that this very often reduces the numbers of people who own the remaining zoned areas to maybe one or two people in some towns causing some towns to die.

      6. They penalized the self build sector where many a tradesman built or renovated a property
      one would think that the country was full of shanty towns. As If anyone building a home for themselves would build something that was not going to be safe.

      But most of all they facilitate the transfer of property wealth from the so called
      ‘squeezed middle’ to vulture funds who are sitting up waiting to pick off the thousands of properties that people have buried their life savings in.

      These owners are being labeled by spin doctors as ‘unprofessional landlords’ because they are willing to listen the odd sob story from a tenant or answer the phone at weekends and so on..

      We are now seeing a wealth transfer from traditional landlords not to tenants but to so called professional landlords.
      These are investors who can borrow funds at low interest, then the are facilitated in the purchase of property which is mostly being sold at less than their reinstatement value.

      These investors are under no pressure to reduce rents and because they employ agents to manage their portfolio’s they have no interest or relationship with the Tenant.

      I think now is the time for government to get out of the way of traditional landlords who want to provide quality properties for rent and look after our tenants.

      The alternative is to set up another government institution like Irish Water or NAMA, perhaps they will call it “Irish Housing” let see how that works out….

  3. cmont at 3:28 pm

    I had considered purchasing a property to rent out a few years ago but when I did the maths it wouldn’t work.
    Being a landlord is about making an investment.
    An investment has two main requirements, the first being the return OF the capital invested and secondly a return ON the capital invested.
    With the current tax system in place for landlords it does not make any sense to become a landlord and I am sure that many existing landlords are regretting ever becoming one.
    Capitalism no longer exists in the property sector for landlords as the socialism pushed by the state onto landlords has basically turned them into proxy housing schemes for the state.
    Even if landlords don’t take on welfare recipients, they are taxed to such an extent that they pay for those recipients anyway.
    It is well recognized globally that price controls by a state do not work.
    Every situation where price controls have been introduced caused either a reduction of that product or service or the elimination of it.
    So, introduction of rent controls will only bring about less landlords and fewer properties available to rent.
    The homelessness crisis will increase with the introduction of rent controls and the state will be under ever increasing pressure to implement more socialist schemes and mal-investments which will also fail.
    The problems of rents are not caused by landlords, they are a symptom of the malaise of our economy and the excessive manipulations and tampering by the state, through taxation, charges, levies, law and regulation, all of which take money away from people’s ability to spend.
    And it is spending that drives an economy.

  4. peadar at 11:04 am

    The crux of the problem is Stupidity and greed combined. A country with no adequate Housing Policy – insane. Young people – especially couples with small children on ub/ua or low wages are being screwed – can never afford to buy a house in Dublin and struggle to pay high rents. My hall has a picture of my fathers brother in his uniform – the only picture left of him – John, who died at 19 in the civil war and was also involved in the rising.
    If he and his compatriots on either side saw the country today, they would wonder what it was they were fighting for – two tiered Health systems, housing for the better off. Insiders buying Nama properties at knock down prices !!! and then watching as their profits soar. Vested interests benefiting from the lack of housing policy etc etc., Work it out for yourself – who is benefitting from the lack of adequate housing policies ??????
    Ireland with a total population of Manchester and Birmingham combined, cannot find a way to be just and fair, especially to young people staring off and their children – Marvellous is it not.
    Germany and other countries in Europe have rent controls. We are so compliant when it comes to enforcing eu laws that make money for the state and the nepitists within.
    There simply needs to be caps on rent, it needs to be controlled by the state. Each area in Dublin for example should have a max cap ., ie top grade apartment in Deansgrange should have a max rent and then descending according to condition etc.,
    We can hope a new coalition next year may come up with a fair and just solution – if they cant – just give me and some of my friends a call – our best solutions usually occur after the second pint of Guiness and they are so much better than what is in place now / not in place now.
    Peadar MacMillan.

    • john at 12:41 pm

      I agree with everything you have said.but unfortunately the private rental sector will disappear as happened in UK (untill they removed rent control).Then it will fall to the Govt. to provide accommodation and we all know their track record.A proper Govt housing policy should have been put in place which would have driven market forces in establishing reasonable rents Ireland is a barren desert when it comes to long term planning .

  5. Mrs M at 8:49 pm

    I can’t see this making any difference for a number of reasons :
    Firstly I don’t accept rent allowance now but I have done in the past because it takes so long for it to come through and I need it paid on time .
    Secondly most landlords I would say just break even with there tax after they write off interest on mortgage repairs etc so even if you carry forward a loss on your tax it’s not paid back to you in cash its just accured . There is no real monetary gain ? Unless of course you have a high tax bill to pay but still I’d say those people are the minority .

  6. aidan at 6:41 pm

    Believe it or not this is a capitalist country, land lords should keep raising rents until the market says stop!
    At that point I would bet rent allowance would have to be raised to current market values or higher. My ow property is in Ras for about €200 a month less than open market value! When renewal comes up I know what Il do! LONG LIVE CAPITALISM (wasn’t my choice but hey!).

  7. Pete. at 5:58 pm

    I’m a rich well off landlord.
    I hate those people who try to dodge tax by trying to change the law..
    Poor people don’t have that choice.

  8. Pete. at 5:45 pm

    If only Bertie Ahern said “Irish banks are bust …German banks can buy the lot for a Euro”.

    Ireland would now have no debts.

  9. Pete. at 5:16 pm

    Should Tesco be offered tax breaks for offering entry to the the unemployed?
    The Irish property sector assumes it can be shored up by taxpayers.
    Peddle your own canoe landlords..

    • charlesm at 6:05 pm

      We do.. more than you know or are willing to recognise..

    • aidan at 6:29 pm

      Pete, really ignorant thing to say,
      Landlords earn their money, and invest it for a return, we don’t have to accept any unprofitable tenants rent allowance in particular! Not to mention the cost of up keep. Wher people don’t pay rent directly from their own poker they generally have less respect for the property, so some balance is justified, otherwise we can choose our tenants more discrminatingly

  10. Mark at 4:54 pm

    Yes i totally agree with a tax break for the landlord who accepts rent allowance, they are the landlords declaring the income earned and paying TAX while some not all of the cash income landlords are not declaring the full income earned on the property and are probably already getting a tax break for the 2nd or 3rd mortgage.

  11. Ali at 2:33 pm

    I have no problem renting to tenants on rent allowance even though I have yet to have a positive experience with one (don’t like to tar people with the one brush). My issue is that I rent a big double room in my house in Dublin for €450 (I believe this is a good price for a double room in a house with 2 sitting rooms, sunroom, large kitchen, dining room, 2 bathrooms, garden etc. and sharing with only one other person) and the the rent allowance for a single person sharing is only €350. I cannot afford to supplement the remainder of my mortgage on my own and I refuse to lie on a rental supplement form and say I am only charging €350 for a room when the tenant supplements the remainder of the rent.

  12. Stephen at 1:30 pm

    This is a ludacrous idea. The tax payer is already contributing to the rent allowance and now landlords also want more. Just crazy
    The biggest issue is the level of rent. Rent allowance needs to be reviewed and be closer to market rents.

  13. Pete. at 1:21 pm

    I am a landlord.
    I make no distinction provided a person has good references.
    This is the “property people” (I’m one!) once again trying to screw tax concessions out of the long suffering taxpayer.
    Section XXX tax breaks…again???
    (The extraordinarily well paid Irish Public Sector ..paid by German Money borrowed by the private sector taxpayer…have already demanded their pay cuts back).

    Another crash is in the offing for certain.
    Next time the long suffering German taxpayer might not lend us money to pay for our financial delusions. Greece 2.

  14. conjob at 12:57 pm

    Yes! I’ve had bad experiences with non- rental allowance lodgers and best experience with them – you can’t tar everyone with the same brush!

    • charlesm at 1:14 pm

      I know, but why take the risk. Nobody indemnifies me for loss of rent or wrecked property and the justice system in this regard is a joke.. There is no support for Landlords so I am ultra careful now..

  15. charlesm at 12:56 pm

    No incentive will persuade me to accept rent allowance. I’ve had too many bad experiences with wrecked and mistreated property and the arrogance of some welfare recipients. I prefer to decorate and keep my places to a high standard and get a fair rent. I am the one with ALL the risk. If I could give my properties to the state and be absolved from negative equity and paying high mortgages, I would.. But no, our government want it every way.. With bad legislation they actually assist the banks foreclosing on private homes, exacerbating the homeless crises and every time the landlord gets it in the neck. I’m sick of it and I have spent every bit of my savings on these “dead” investments.. So I will stick to those tenants who work and strive like I do to make a living..

  16. Mattie Nugent at 12:45 pm

    Never again to social welfare tenants, the last tenants thrashed the place before leaving after not paying the rent for the previous 3 months, and after finally getting rid if them they had the neck to go to a local TD complaining of no place to live. Once bitten twice shy.

  17. John joyce at 12:37 pm

    Double tax them if shown they refuse

  18. Barbara Seligman at 12:23 pm

    I’d burn the property down before I’d deal with Councils. You would be doing the Governments job and expected to work for nothing. burn burn burn

    • Peter Grant at 1:08 pm

      I know how Barbara feels I bought a derelict house borrowing most of the money and spent nearly five years working on it put all our money into it, thought I was doing great bring an eyesore in the street back to its former glory,

      Now I have been renting it Some to rent allowance and some working people.

      Had management Issues with both groups, but the rent allowance had much more issues including mental issues/ addiction issues.

      Now that my costs are not all tax deductible, my wife’s income is liable to further taxation.
      The net effect is that we provide a service to the state and are expected to pay for the privilege.
      There are other buildings that are lying empty in my town and I would have loved to buy another and re-vitalize it.

      Now I have people contacting me looking for a place to rent.

      I have come to the conclusion that the civil servants who run this country are completely institutionalized and have no respect for those who live in rural communities and are trying to improve our towns from the the resources we have.

      I know many others who like me are completely frustrated by the system.

  19. Olive at 12:18 pm

    If the tenants are suitable then there is no reason to rewards landlords for taking them on. The biggest issue is the level of rent allowed under rent supplement schemes. It doesn’t meet the current market rates. Why should a landlord benefit from getting a tenant into their house? That makes no sense for the country. Increase the rent thresholds so landlords are able to accept rent supplement and allow these tenants to feel like all other tenants in the country. I have been renting my house to a lovely family who are in receipt of rental supplement for the past three years. They’re excellent tenants and never have any problems receiving the rent each month. My only issue is that I’m restricted in raising my rent now to match the current market rates. Of course I’d love to have a tax break but I’d rather it was applied to the LPT instead of letting me benefit from doing the right thing in the first place by allowing a lovey unemployed family rent my home.

  20. John O’Shaughnessy at 12:13 pm

    Yes, they should, as they are taking on a difficult class of rentals fraught with extra responsibilities.

    • Catherine Kelleher at 12:18 pm

      Yes definitely, as a forced landlord myself I have to pay tax on having someone living in my home who gets rent allowance and i have to chase them for the rest ever month!! sick of it

      • Olive at 12:23 pm

        Why are you still renting your house to people who don’t pay their rent? That has nothing to do with the fact that they are in receipt of rent supplement. You could encounter the same problems with Private tenants, except then you’d be chasing them for the whole amount of rent each month !

        • Catherine Kelleher at 12:29 pm

          I am paying for the rent allowance in taxes, tenant is paying very little and is struggling to pay that. I am living with my mother because i can’t sell my home and can’t afford to live anywhere else. I know i could have same issues with private tenants, I know if I was in that situation I would get the same help, but alot of people are working the system, it is the governments fault. I am paying an estate agent to chase tenant and they are not doing there job, i have a tax bill every year and am out of pocket. I don’t see a way out until prices go back up and won’t get another mortgage ever.

      • D. Dony at 12:29 pm

        My sister and I are in a similar position with our apartment. We don’t want to be landlords but the negative equity means we can’t sell just yet. We had a choice of tenants and I went for the first one trying to be fair and give people on rent allowance the benefit of the doubt. However From the start the tenant constantly payed late and now not paying at all, it’s heartbreaking. When I rent to new tenants I can’t afford to have someone who doesn’t have a standing order set up to pay the agreed rent on the agreed date. Which means I won’t be accepting rent allowance ever again.

        • Catherine Kelleher at 12:35 pm

          Dony, have you tried the RAS scheme with the corporation, i am looking into it. They pay full rent to you directly and they find tenants for you

          • john at 9:32 pm

            Great scheme. One would you like to called out in the middle of the night when they are trashing the place.You are responsible for the tenants damage and conduct

          • Tom at 1:54 pm

            RAS scheme sound fantastic until you are told you can’t do any checks on the Tenants supplied .
            you are still responsible for all the normal ware and tear items white good etc.
            also if the tenant fails to pay their rent to the council your payments are stopped and you are force to proceed to the PRTB.

            Every property owner should look for 2 months deposit and one months rent regardless
            apply admin charges for late payments etc

          • Catherine Kelleher at 12:45 pm

            I have been on to the council about Ras and got this reply,
            f we have tried to contact the tenant in relation to arrears and we have been unsuccessful then we request that the landlord issues a notice to quit for failure to pay their rent. The local Authority cannot issue the notice to quit as we are not the landlord. The landlord is paid while this is going on and there is no ceasing of the rent during this process.

    • Olive at 12:20 pm

      What extra responsibilities John? They are tenants just like everyone else. There’s nothing special about them, except that the landlord is restricted with the level of rent they can charge.

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