The 2024 Budget for Property Investors & Landlords in Ireland: A Deep Dive into Tax Relief for Landlords

The 2024 Budget for Property Investors & Landlords in Ireland: A Deep Dive into Tax Relief for Landlords

2024 Budget Disappoints: Property Investors Receive €600 Tax Benefit, Less Than the Tenants’ €750 Credit

The 2024 budget for Ireland was unveiled with much anticipation, but for many in the property sector, it proved to be a letdown. Overall, the budget was disappointing for property investors and landlords. The measures introduced were underwhelming and will do little to encourage landlords to remain in the rental market. The proposed solutions felt more like empty gestures rather than genuine attempts at reform.

Tax relief for landlords

The Details

A temporary tax relief is being introduced to support private landlords if they keep their rental property in the rental market for the next four years. It will provide a relief at the standard rate of 20% on residential rental income. It will be:

  • €3,000 for 2024 (actual saving €600)
  • €4,000 for 2025 (actual saving €800)
  • €5,000 for 2026 (actual saving €1000)
  • €5,000 for 2027 (actual saving €1000)

Authors opinion

The government missed an opportunity to provide genuine relief to landlords. Had this been introduced as a tax credit, landlords would see a true tax saving of €3,000 in 2024, directly benefiting their financial position. Alternatively, even if the authorities were adamant about the tax relief structure, they could have permitted the relief at the marginal tax rate. Considering that many individuals fall under the 40% tax bracket, this would have doubled the tangible benefit from the proposed relief.

In the bigger picture, when landlords juggle overhead costs, maintenance, and various challenges associated with property management, a mere €600 seems trifling. It begs the question: Is this truly the best the government can offer to landlords to ensure they remain active contributors to the rental market?

Vacant Homes Tax

The Details

The rate of the Vacant Homes Tax is being increased from 3 times to 5 times a property’s existing base Local Property Tax liability. This increase will apply from the next chargeable period, starting 1 November 2023.

Authors opinion

Ireland’s housing crisis is undeniable, and solutions are urgently needed. From that perspective, the move to increase the Vacant Homes Tax from 3 times to 5 times a property’s existing base LPT liability can be seen as a tangible step towards nudging homeowners to reintroduce vacant homes into the rental market. However, it’s essential to tread this path with sensitivity and understanding.

It’s distressing to perceive this as yet another punitive measure imposed upon homeowners. Not every vacant property has an owner basking in prosperity, deliberately sidelining a perfectly habitable space. There could be myriad personal reasons—aging homeowners, individuals battling health concerns, or financial constraints—that render them unable to refurbish or repurpose their property. While the introduction of the vacant home grant offers some relief, it may not be enough for all.

On the flip side, the increased tax might inadvertently play into the hands of investors, offering them lucrative opportunities. Many homeowners might be nudged into selling their properties, potentially below market value, to avoid the tax burden.

In summary, while the intent behind the tax hike might be rooted in solving the housing crisis, the human element should not be overshadowed. A one-size-fits-all approach might not only be ineffective but could inadvertently exacerbate the very crisis it aims to solve.

Some other measures announced that affect tenants and may impact on an investor


Additional Tenant-Focused Measures: Implications for Investors


Social and affordable housing in 2024

The Details

  • 9,300 new build social homes are expected to be built in 2024.
  • 2,130 leased social homes will be delivered through various leasing schemes.
  • Over 6,400 affordable and cost rental homes to be built
  • HAP Funding for 8800 new HAP tenancies
  • 1,400 new RAS tenancies in 2024

Authors opinion

From an investment perspective, these measures hint at lucrative opportunities, particularly for larger developers. Given the sheer volume of housing needed, the government will likely lean on the private sector’s capacities and efficiencies.

Yet, a glaring omission caught the attention of many: the retention of the 13.5% VAT rate on new builds. Many, especially larger developers, had hoped for its reduction or abolition to make new builds more affordable. This move would have eased housing availability and affordability concerns.

Rent Tax Credit

The Details

The Rent Tax Credit for people paying for private rented accommodation will be increased from €500 to €750 a year from 2024.

Authors opinion

When comparing the incentives for landlords and tenants, there’s a clear disparity. The tenant receives a direct €750 tax credit, while the landlord, despite their investment and risks, gains only a €600 tax relief. This results in a €150 difference in favour of the tenant.

Tenants undoubtedly need affordable and stable housing. However, it’s equally crucial to maintain a fair environment for investors. If the rental market isn’t seen as appealing, investors might withdraw, which could reduce available housing. It’s essential to balance tenants’ needs with ensuring that investors remain interested and safeguarded in the rental market.


Regulation of the housing sector

The Details

  • €13.4 million for the Residential Tenancies Board (RTB).
  • €10.75 million for local authority inspections and regulating short-term lettings.

 Authors opinion

The €13.4 million earmarked for the Residential Tenancies Board (RTB) is a move in the right direction. However, it’s vital that this funding is allocated wisely. Presently, the RTB’s functionality and responsiveness leave much to be desired, often resulting in a substantial drain on a letting agent’s time.

Allocating €10.75 million for local authority inspections and regulating short-term lettings carries mixed implications. On one hand, heightened inspections indicate increased regulation in the rental sector, which can ensure better standards and protection for tenants. However, the timing might be less than ideal. At a juncture where the aim is to attract more landlords to the rental market, additional regulations might be perceived more as a hindrance than a help.

The anticipated regulations on short-term lettings, especially within rent pressure zones, deserve attention. Mandating planning permission for such rentals clearly shows the government’s intent to migrate these properties back to the traditional rental market. While it’s another instance of governmental oversight on an investor’s assets, it’s pivotal for investors to recognize that tighter controls are on the horizon, especially with increased inspections.


In Conclusion

To wrap up, while the 2024 budget does have its merits, the overall impression for many in the property sector might be that of missed opportunities. As Ireland continues to navigate its housing crisis, a balanced approach, considering both landlords and tenants, is paramount. The road ahead will require thoughtful deliberation and genuine attempts at reform.



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