By Fiachra Ó Cionnaith, Eamon Quinn, and Daniel McConnell
Thousands of landlords will be given millions of euro worth of Budget 2019 tax breaks to stop them from fleeing the market before any fresh clampdowns are introduced.
The Irish Examiner understands the Government will confirm tomorrow that landlords will be given 100% mortgage interest relief on any loan used to pay for a rental property from next year.
As part of a wider package, which will also include a long-term €300m affordable housing plan, the Government will outline new tax breaks for landlords.
While the move is likely to be criticised for focussing on those who own the properties instead of people living in them, Government sources said the measure will be flagged as key to addressing the surging housing and homelessness crisis.
The Irish Examiner understands that the plan, which will be unveiled during tomorrow’s budget, will include:
- A new scheme allowing landlords to write off 100% of their mortgage interest repayments on loans used to buy their rental property. This, a high-level source said, means that “they will be able to deduct 100% of the interest paid on borrowings from next year”
- A separate scheme involving a 4% annual capital gains tax relief capped at five years for landlords who buy and retain a rental property where someone is already living
- A three-year €300m affordable housing scheme which sources claim could see 9,000 homes built a year
- And a €154 Housing Assistance Payment budget rise
Although Taoiseach Leo Varadkar has claimed tomorrow’s budget is “not an election budget” before a post-Brexit run to the polls, it is also understood Budget 2019 will involve a series of other financial giveaways targeting key voter groups.
- Health: a “multi-annual investment” GP commitment, a €10 over-70s medical card drug cost cut, a 50c prescription charge reduction, and “guaranteed” hospital bed funding
- Education and Justice: €700m schools investment and 800 more gardaí
- Social Protection and Childcare: Two weeks’ extra parental leave from November 2019, €5 across the board welfare rises, the full Christmas bonus returned, and job-seekers’ allowance extended for the self-employed and small businesses
The figures emerged as Irish Fiscal Advisory Council chairman Seamus Coffey warned the Government not to exceed existing budget limits despite Friday’s €1.1bn surprise corporation tax receipts bounty.
Mr Coffey said while the extra money is like striking “oil”, “those revenues will drop as they run out”.
“The concern isn’t that we are receiving this money — it is better to be getting the money than not — but the concern would be that it could be used in the budget arithmetic and of course it should not be used,” he said.
His concern was shared by Fianna Fáil finance spokesman Michael McGrath.