MEMBERS of the Irish Property Owners Association gathered in Dublin on Sunday 11, the 500-strong meeting to play out issues concerning taxes, bankers and Government regulation in the property market.
Chairman of the association Stephen Faughnan, demanded the return of full Mortgage Interest Relief on property for rent, a move that would reduce “the huge burdens” being faced by landlords in Ireland.
“With lending compliance, taxation and not treating the private rental sector as a business, many landlords have been put into serious financial difficulty at a time when demand for rental property is increasing,” he said. “Mortgage Interest Relief is badly named. For private landlords, it is a legitimate operating expense and has to be allowable as an expense at 100 per cent to resolve the ridiculous situation where 25 per cent of mortgage interest paid to a bank is treated as part of the private landlord’s income.
“Landlords in the private rental sector are the only sector taxed in this manner. Landlords in the commercial rental sector continue to enjoy 100 per cent relief.”
While acknowledging that taxation in any climate is difficult, Mr Faughnan said that the burden of this discriminatory tax, combined with increasing compliance, regulation, reductions in Rent Supplement, local charges not levied on the user and property taxation leave property owners with no alternative but to consider exiting the sector.
“In addition to tenants paying their own rent, the sector currently supplies good quality affordable accommodation to 96,000 people in receipt of Rent Supplement, at a fraction of the cost to Government and Local Authorities.”
Addressing the way in which banks deal with landlords, the IPOA chairperson said that buy-to-lets are being viewed by them as the Scarlet Pimpernel of mortgages in many cases, with little or no help being given to allow private landlords “to gracefully exit properties that are hugely indebted”.
“At present, there is effectively no system within the banks for private landlords to address the huge problems which are simmering. If individually, the banks won’t deal with this issue, I am calling for the Irish Banking Federation (IBF) to provide guidance to their members. The IPOA is ready and willing to sit down with the IBF, or individual banks, to see what can be done in the short to medium term but our efforts to get into dialogue with them have so far been rebuffed.”
