Article
Accidental Landlords receive little benefit in Budget tax changes.
In what was billed as a tax break for landlords across the country, Minister Michael Noonan re-introduced, on a phased basis, 100% mortgage interest relief in today's Budget.
New interest relief brings average saving of just €77 next year to landlords.
In what was billed as a tax break for landlords across the country, Minister Michael Noonan re-introduced, on a phased basis, 100% mortgage interest relief in today’s Budget.
This means that landlords will be able to avail of an increased tax deduction for the mortgage interest they have paid. The amount they can claim will go from 75 per cent to 80 per cent next year, and back to 100 per cent over the coming five years.
It is hoped that this measure will boost the struggling rental sector somewhat but the actual estimated reduction in taxes that will be enjoyed in 2017 by residential landlords is meagre.
To figure out what this new measure will mean for our clients we looked at a quick sample of 30 small landlords and what they paid in tax last year versus what this measure will mean next year. The average saving they can look forward to is just €77.
Dig a little bit deeper and the news becomes even less exciting. Approx. 50% of all properties in the rental sector are said to be mortgage free. On top of this, a vast swathe of ‘accidental landlords’ have tracker mortgages. They are paying such little interest that this relief will provide next to nothing for them.
Research from the PRTB last year found that as many as 30 per cent of landlords are considering exiting from the business .Unfortunately, this measure will not change their minds about that.
Date published 11 Oct 2016
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