The budget announced by Minister McGrath provides some helpful measures for landlords and the property sector, but more is still needed to address the housing shortage in a meaningful way. As a large property management company operating across Ireland, we welcome initiatives to support landlords and investors, but a more comprehensive strategy is required to increase the housing supply.
Additional Tax Relief for Landlords to Keep Properties Rented
The new tax relief for rental income of up to €1,000 per year is a positive step that will provide support to the majority of landlords who own just one or two properties. This may encourage landlords, especially small-scale investors, to remain in the rental market rather than selling or leaving.
However, the clawback provision if properties are withdrawn from the rental market is concerning. More incentives and security for landlords is needed to prevent further depletion of rental stock. We would prefer to see unconditional tax relief as well as measures to make renting property more attractive and viable.
Higher Vacant Property Tax May Have Unintended Consequences
Increasing the vacant property tax aims to bring more empty properties into use. However, some vacant properties require major refurbishment and it can be challenging to complete works within a year. Higher taxes could push some owners to sell or demolish buildings rather than rent them out. Targeted grants such as the “Vacant Property Refurbishment grant” may be more effective.
Capital Investment in Social and Affordable Housing Essential
The major boost in capital spending on social and affordable housing development is a very positive development. 9,300 new social homes and 6,400 affordable homes will make a real dent in the housing waiting lists. As a company involved in social housing provision, we strongly support greater investment in these areas.
Overall, this budget provides some short-term relief through tax credits but a more comprehensive strategy is needed to address systemic issues in housing supply.
Is Now a Good Time to Become a Landlord?
With rents rising and demand for rental properties still high, now can be a good time to become a landlord despite some challenges. The tax relief announced in the budget makes owning a rental property more attractive. High tenant demand means vacancy rates should remain low.
However, increasing regulations, rising interest rates, and high property asking prices require careful evaluation. New landlords need expert guidance to ensure a profitable investment. Overall, for savvy investors, opportunities exist in the rental market. Selecting the right property in the right area is key.
Property Management Ireland
KPM Group has been delivering the highest standards in Property Management for almost 25 years. We act for private investors, lenders, as well as domestic and international funds across all sectors including private rental, build-to-rent, owner management companies, local government agencies, and award-winning social housing developments.
As property management professionals, we service domestic and international fund investors, the financial services sector, local government agencies, and the owner management company sector, where we have our roots and continue to expand.
