As most of us now know, the eviction ban controversy has sent ripples down both sides of the aisle. For the current government to succeed in ending the moratorium, it has made some concessions, which landlords and investors should familiarise themselves with.
This post will look at these concessions and their impact on the industry.
Fair Deal Scheme Changes
Although several pressures caused the government to re-evaluate the fair deal scheme, the news that a change in regulation will allow nursing home residents to keep 100% of their rental income comes at a welcome time.
Because historically, residents could only retain a smaller portion of their rental income, many residents of long-term care and/or their families decided it wasn’t worth placing the property on the rental market.
Now that the owners or their families retain all the rent generated, industry experts expect a substantial increase in rental properties over the next 12 months.
Derelict Housing Grants
Another significant move is the government grant for derelict properties or the ‘Croi Conaithe’ scheme. Previously, only properties built prior to 1993 were covered, but now that date will be changed to 2007 and will come into effect on 1st May 2023.
The grant aims to bring pre-existing derelict properties to a livable standard. This is again another tactic to alleviate some of the current stress on an under-resourced rental market.
The grant has two parts. The first part, a standard refurbishment, has a maximum upper limit of €30,000, and the second part, reserved for derelict properties, has a limit of €20,000.
This means a derelict property has a full grant availability of €50,000.
The grant is not restricted to owner-occupiers; it’s also available to first-time homebuyers who purchase a derelict property to refurbish and become their primary residence.
Tax Breaks For Landlords
Another move that is being considered is providing landlords with tax breaks – the exact details of which are yet to be released. One confirmed element will be that Landlords will benefit from charging less than the market rate on their rental properties through a tax rebate designed to incentivise landlords and stabilise ever-increasing rental costs.
This supplements the tax relief already in place for landlords called expenditure relief. There are already multiple expenditures you can claim against your rental income to reduce your tax liability; they are:
- Maintenance costs (painting, cleaning, etc.)
- Insurance premiums
- Necessary repairs
- RTB registration fees
- Management, legal or accountancy fees
- Advertising fees
You can also claim capital allowances on purchasing new furniture and white goods for your property at 12.5%.
Rent a Room Scheme
This initiative allows homeowners to benefit from a maximum of €14,000 in tax relief when renting out a room on their property to a tenant.
To qualify for rent-a-room relief, your home must be located in Ireland and occupy it as your sole residence during the assessment year. This means it is your home for most of the year and is where people typically expect to contact you.
In most cases, you do not have to own the property – you could be a tenant and be sub-letting to someone else.
KPM Property Managers Ireland
If you need advice on the available tax breaks, KPM can help.
KPM Group has helped countless landlords free themselves from managing their portfolios and trust us to deliver the maximum return on investment while providing quality property management services.
If you would like to speak to us here at KPM about your portfolio, then get in touch today, and a staff member will be happy to help in any way we can.