Ireland is reversing a policy that prevented private landlords from claiming full tax relief on their mortgage interest.
The reversal of the 2009 policy comes as the British government is to introduce a similar rule next April.
In a Budget statement last week, Ireland’s finance minister Michael Noonan said that landlords will be able to claim 80% tax relief from next year, up from the current 75%.
The amount they are able to claim will rise 5% each year until they can claim 100%.
Noonan said that the policy had been introduced originally to rescue Ireland’s public finances. However, the housing crisis in Ireland now prompted the change.
From next April, private landlords in Britain will be increasingly restricted on the amount of mortgage interest rate they can set against tax.
By 2020, they will not be able to deduct any mortgage interest from their rental income, but will instead receive a 20% tax credit.
An application for a Judicial Review to challenge the change failed in the High Court this month.
Landlords and landlords’ groups say they will continue to fight the measure through stepping up their lobbying activity.
It’s true that the UK tax change is vaguely similar, but it is much more Draconian than the Irish model. It’s interesting to also note that the Irish are abolishing their tax relief restriction because of the housing crisis, yet we are heavily into one (still with a steep downward trend). Homelessness figures are appalling with bizarre situations like in Peterborough (where 74 families are being evicted to make way for the homeless) and some councils are beginning to form shanty towns of portacabins.
Due to S24 many landlords will either sell up or put up rents. This has a knock-on effect that leads tenants to downsize or move to cheaper areas. The result is that the low income individuals and families get pushed out at the bottom and throw themselves at Councils that are already proving they can’t cope.
Then we have additional licensing, new HMO mandatory licensing, regulations for this that and the other. How does this all help?
House sales figures are falling which knocks builder’s confidence. They’ll be down-scaling their activities if things don’t improve and as landlords are now far less willing to invest, there is less demand for new houses.
No Irish jokes here. They’ve seen the sense. It’s our lot that we should be laughing at, except the situation is so ****** dire!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Perhaps the Government needs to look at what is happening in more advanced countries.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register