Threshold, the national housing organisation, has expressed disappointment that one in ten households in Ireland living in private rented accommodation were ignored in today’s budget. While substantial increases in mortgage interest relief have been provided for first-time buyers, increases in tax relief for private renters were paltry. For example, the annual tax relief for a single person aged under 55 years increased by just €30, from €330 to €360; while the tax relief for a married couple aged under 55 years increased by €60, from €660 to €720.
Renters on low incomes in the private rented sector need help now more than ever. The most recent CSO figures show that rents climbed by 6.2% between September 2005 and September 2006, compared with 1.8% in the previous year. The pace of increase is also worrying – rents increased by 2.6% in just three months between July and September. Threshold believes this is because landlords are beginning to pass on increased mortgage costs arising from recent interest rate hikes. Higher rents may create serious affordability problems for people who are already struggling with increases in utilities such as electricity and gas.
Threshold is particularly concerned for families with children living on low incomes and for the increasing number of older people who are seeking advice with housing problems. The 2005 EU Survey on Income and Living Conditions showed that one in five (21%) renters in Ireland live in consistent poverty, compared with less than 3% of home owners. Many renters experience debt problems arising from ordinary living expenses or go without heating at some time during the year due to a lack of money. Today’s budget was an opportunity missed to help these families.
Aideen Hayden, Chairperson of Threshold, said:
“The budget increases in rent relief of €30 for a single person and €60 for a couple are derisory. Threshold’s statistics show that the average monthly rent for a one-bedroom apartment in Dublin city centre is now just under €1,000. So the annual tax relief of €360 provided in the budget would pay about 10 days rent. When this tax relief is compared to the mortgage interest relief changes for first-time buyers, the unavoidable conclusion is that the Government has ignored issues for people renting in the budget.
It is ironic that people who can afford to buy a home get more support from Government than workers on low pay who struggle to pay their rent. Threshold is calling on the Government to level the playing field by ratcheting up tax reliefs for renters and by introducing other supports for renters on low incomes.
Government should introduce, as a matter of urgency, an affordable rental scheme similar to the affordable housing schemes currently available for home buyers. The Government should also introduce tax disincentives to discourage investors who leave their properties vacant and refuse to make them available for renting.”
Notes to Editors:
The maximum level of rent paid for private rented accommodation on which tax relief can be claimed, at the standard rate of tax, is being increased for those aged under 55 years of age, from EURO1,650 to EURO1,800 per annum for a single person and from EURO3,300 to EURO3,600 per annum for widowed and married persons. This equates to a tax credit of EURO360 per annum for single persons and EURO720 for widowed and married persons. For those aged 55 years and over, the maximum level of rent paid on which tax relief can be claimed is being increased from EURO3,300 to EURO3,600 per annum for a single person and from EURO6,600 to EURO7,200 per annum for widowed and married persons. This equates to a tax credit of EURO720 per annum for a single person and EURO1,440 per annum for widowed and married persons.(Department of Finance, 6 December 2006)
The 2005 EU Survey on Income and Living Conditions showed that 21% of renters in Ireland live in consistent poverty compared with 2.9% of home owners. See Central Statistics Office http://www.cso.ie
