Paul Murphy opposes rent income tax cuts, urges tenant protections
Paul Murphy criticised reports that the Government is considering reducing tax on rental income, arguing it would privilege passive income over earned income and that evidence does not support a mass exodus of landlords. He outlined tenant-focused alternatives and a range of housing measures including state purchases with tenants in situ, sinking funds for multi-unit developments, and cautious support for modern construction methods.
Tax on rental income
He questioned why passive rental income should be taxed at a lower rate than earned income and why tenants should effectively pay a higher rate of tax than landlords. Murphy pointed to record-high rents and data showing private rent paid to private landlords rose from €3.1 billion in 2016 to €4.7 billion in 2022, arguing the private rented sector is growing rather than shrinking.
Tenant-in-situ acquisitions
Murphy said the appropriate answer to eviction pressures is for the State to buy properties with tenants in situ and keep tenants in place. He welcomed progress by South Dublin County Council in acquiring 99 houses under the tenant-in-situ scheme, saying it helps long-term HAP or RAS occupants become regular social housing tenants and frees up housing elsewhere.
Sinking funds and building maintenance
He argued all multi-unit developments should have a sinking fund fed by a portion of the management fee each year so money accumulates over 20 to 30 years for major works. Murphy stressed that periodic major works are the nature of buildings and owners must meet those costs from reserved funds.
Construction methods and grants
Murphy expressed support for modular builds and modern methods driven by the new construction technology centre and the Mount Lucas training centre, while cautioning that such methods have rarely proved much cheaper. He said a review of housing adaption grants is complete or near completion with the minister and will consider income thresholds and grant levels in light of construction inflation.
Rent measures, regulation and public sector context
He listed policies aimed at lowering rents - rent pressure zones, the rent tax credit, investment in cost rental housing and increased social housing which can move people off HAP into social tenancies. Murphy said he would ask the RTB to look into Home Hack, noted there are more teachers registered and employed than ever, and that initial talks with public sector unions have begun on the next pay round.
We publish thousands of recordings to make Irish politics transparent and resistant to manipulation. Spotted an error? Report it — together we are building a reliable archive of Irish politics.
The Irish Times reported that the Government is considering reducing tax on rental income. Why on earth should people pay less tax on passive income than they pay on earned income? Why on earth should a tenant pay a higher rate of tax on their income than a landlord pays on their income? The justification for this is the idea that there is a flood of landlords out of the market, they have such a hard time and so on. The evidence does not back that up. We have the highest rents on record. The total going to landlords in 2022 was €4.7 billion in private rent to private landlords compared to €3.1 billion in 2016. We know that the private rented sector is getting bigger rather than smaller. The answer in terms of evictions is for the State to buy with tenants in situ and leave the tenants in place. Thank you very much. I will be as quick as I can. When it comes to multi-unit developments, all of them should have a sinking fund. A portion of the management fee should go into that every year. It builds up over 20 or 30 years. There is a pool of money to carry out any works that need to be done. Whether you live in an apartment or a house, every 30 years or so, you have to do major works to it. That is the nature of buildings and that is money that the owner has to pay. In terms of the Act's review, I do not know the timeline on that, but I will check with Minister Bryan and come back to Deputy Callan on it. Similarly, I am not familiar with Home Hack, but we will ask the RTB to look into it. In terms of any tax package for small landlords in the budget, again, no budget decisions made on this, but any time we bring in a tax incentive or tax concession, it is done for a reason. We brought in a rent credit in the last budget, for example, which means that somebody renting pays less income tax than somebody earning the same amount of money but pays their mortgage or owns a house. We did that in recognition of the very high rents that people have to pay, but I have expressed the view and I have expressed it again that if there is any tax concession for small landlords, it must be linked in some way to benefits for the tenants as well. It cannot be just about the landlord. I agree with Deputy Durkin and others in terms of housing progress being welcome, but still too slow. We are increasingly using modern methods of construction. We have the new construction technology centre driving that and also the training centre in Mount Lucas. I am a big supporter of modular builds and modern methods of construction, but we also need to be realistic. The promise of them being cheaper and a hell of a lot quicker has never really been realised. It might be quicker, rarely cheaper, it has a role to play, but we need to be realistic about the extent of the difference it can make. On the housing adoption grants, I think that review is complete or nearing completions with Minister O'Donnell at the moment, and it does look at the issue of income thresholds and also the amount of grants that may be needed given the scale of construction inflation in recent years. Deputy Barry mentioned housing issues, what are we doing to reduce rents? We have the rent pressure zones, we have introduced the rent tax credit. We are investing in cost rental housing in particular, which will benefit a lot of people, building more social housing, which allows a lot of people to come off HAP into social housing, thus freeing up housing for others, and they are the kind of things that we are doing to bring down the cost of renting. While there are vacancies in a lot of schools, it is worth pointing out that there are more teachers in Ireland than ever before registered with the Teaching Council, employed by the Department of Education. We are negotiating with, or at least we have initial talks now with the public sector unions on the next pay deal, on the next pay round, which relates to the amount that public servants, including teachers, get paid. Finally, I just want to join with Deputy of the Heart in welcoming the progress made by South Dublin County Council in acquiring 99 houses from landlords under the tenant in situ scheme. I think it is a very good scheme. It means that people who have been maybe on HAP or on RAS for a prolonged period of time can become regular social housing tenants, and I am glad that that is really taking off, not just in South Dublin, but all over the country.
Thank you for downloading 🙏
If you publish this material on social media, we would be very grateful if you tagged VideoParliament. It helps us reach more people and keep building a transparent archive of Irish politics.
