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Small landlords face ‘penal tax regime’

The Irish Property Owners’ Association (IPOA) and the Institute of Professional Auctioneers and Valuers (IPAV) have jointly called for taxation measures aimed at the private-rental sector in Budget 2023.

The groups blame what they describe as “a penal tax regime” for the exodus of small landlords from the market.

They argue that the treatment of rental income for overseas funds is “in stark contrast to the tax regime in place for private landlords that sees rental income taxed at marginal rates of up to 55%”.

Their submission calls for the introduction of a new 25% rate of tax, which would include USC and PRSI, on profits from residential rental income.

Rent pressure zones

They say that this should be funded from the introduction of a tax rate of 25% for all investment funds and real-estate investment trusts (REITs) operating in the residential rental market.

The organisations also want roll-over relief in relation to Capital Gains Tax (CGT) on the sale of all assets, where the proceeds are re-invested in residential property within 12 months.

Both groups are also calling for a reduction in Capital Acquisitions Tax (CAT) on the inheritance of residential investment properties.

They also urge the Government to change the rules on rent pressure zones, arguing that landlords should be allowed to charge market rent in cases where they re-rent a property after a tenant leaves.