We would hope that measures to address the housing crisis will be a key feature of Budget 2025 with a general election around the corner, the Government know they need to introduce measures to address what is a key challenge for Irish society and the business community.
Landlords
Budget 2024 introduced tax relief for small landlords for the years 2024 – 2027. In 2024, the scheme is worth up to €600 to landlords and is planned to be scaled up to €1,000 in 2027. Minister Jack Chambers has however stated that he has no plans for any further tax reliefs for landlords of this manner.
Will the Government take the much bigger leap needed and consider measures to incentivise landlord supply on a larger scale such as a tailored and controlled s23/s50 type relief for rented residential/student accommodation?
Tenants
The rent tax credit introduced in Budget 2023, increased last year from a credit of €500 to a credit of €750 for a single person. We would expect this rent credit to increase to €1,000 in Budget 2025.
The rent credit is also available where a parent pays rent in respect of a child attending university – provided the child is staying in rented residential accommodation. The relief was extended in Budget 2024 to include rent paid by a parent on behalf of a child staying in a “digs” type arrangement which had been previously excluded.
Help-to-Buy Scheme
The Help-To-Buy scheme is currently set to expire at the end of 2025. This will likely be extended by the government in Budget 2025.
Currently, the scheme only applies to properties with a value of up to €500,000, it is thought that this cap may be increased in Budget 2025. It is also thought that Budget 2025 may expand the scheme to home buyers who may not have paid €30,000 in taxes in the past and allow rent paid previously by the buyer to be included in the calculation of the tax credit due.
Mortgage Interest Relief
There is likely to be an extension of the ‘temporary’ mortgage interest relief which was introduced in Budget 2024. This will be a welcome support to homeowners who are struggling to pay their mortgage.
Businesses
From an economic perspective, the housing crises poses a threat to future growth for businesses as they struggle to retain and attract talent.
There are a number of tax policies that could assist with this issue, such as reducing the tax costs (employer BIK) for businesses who let out properties to staff at below the market rates, introducing capital allowances for residential accommodation constructed by employers and rented to employees and also extending the retrofitting scheme to modernise current housing stock.
Over the next few weeks in the lead up to Budget 2025 #RBKTax will look at potential tax measures that the Government could consider and provide insights into Budget 2025.
Budget Briefing Hybrid Event
RBK will be holding its annual Breakfast Budget Briefing as a hybrid event in person at the Athlone Springs Hotel in Athlone and streaming live online on Wednesday, 2nd October. Mike Scanlan, Tax Director, RBK will be analysing the tax measures announced in Budget 2025 and David McNamara, Chief Economist with AIB will look at the economic outlook.
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Contact Us
Should you wish to discuss any aspect of landlord and homeowner tax, please contact our team:
Céire Muldoon - Senior Tax Manager +353 - (0)1 6440100
