Budget 2022: Housing measures are 'for landlords and landowners'

budget2022
Budget 2022: Housing Measures Are 'For Landlords And Landowners'
Budgetary measures were also subject to criticism from property owners, who described an 'exodus of small investors' from the housing market. Photo: Getty Images.
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Measures on housing contained in Budget 2022 are for landlords and landowners, according to the Labour party.

Labour spokesperson on housing, Rebecca Moynihan, said the Budget was a "missed opportunity" to tackle systemic issues in the housing market and confront the rental crisis head on.

Budgetary measures were also subject to criticism from property owners, who described themselves as “disheartened” amid an “exodus of small investors” from the market.

Housing measures announced on Tuesday for Budget 2022 will see €6 billion allocated to the sector next year, representing a 15.6 per cent rise on 2021.

Some €174 million will go towards the direct delivery of 4,000 affordable homes in 2022, while the help-to-buy scheme will be retained for 2022 at current rates and reviewed next year.

A zoned land tax will also be introduced to replace the vacant sites levy, and there will be a three-year extension to pre-letting expenses relief for landlords.

Power imbalance

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Ms Moynihan said the measures announced showed “no sense of urgency to tackling the crisis”.

“All measures announced are caveated with a long lead-in time, despite the fact that first time buyers are competing with investment funds, renters are paying above and beyond for a roof over their heads and students are sleeping on couches,” she said.

“The zoned land tax announced is lower than the vacant site tax it’s replacing. While it’s welcome that Revenue have been tasked with collecting it, the drop from seven per cent in the vacant site tax to three per cent in the zoned land tax and long lead-in time renders it toothless.”

Ms Moynihan said the Budget contained tax breaks for landlords "but nothing for renters", adding it was "particularly telling that there has been no change to the HAP (Housing Assistance Payment) limit despite the record rents throughout the country."

There’s no attempt to make things better or to redress the power imbalance

"There’s no attempt to make things better or to redress the power imbalance in the rental market," she said.

Responding to the Budget on Tuesday, national housing charity Threshold also said an increase in base HAP rates is required to ensure that low-income renters are adequately supported.

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The charity welcomed the committed delivery of housing supply but expressed “concerns over the long lead-time involved, as well as the very low rate of taxation” when it came to the new zoned land tax.

It welcomed a €5 increase in the fuel allowance announced as part of the Budget, but said the National Retrofitting Scheme must include specific measures for landlords to assist with the improvement of energy efficiency for private rented housing.

“Given recent rises in fuel costs, BER improvements within the private rented sector are essential,” chief executive of Threshold John-Mark McCafferty said.

Property owners 'disillusioned'

Meanwhile, the Irish Property Owners’ Association said it was “disheartened, disillusioned and disappointed” following the Budget announcement, amid what it described as an “exodus of small investors” from the market.

The organisation, which represents the interests of private residential property owners, said its members were being “pushed out of the market at a very high cost to the exchequer.”

It said investment funds had been given “vast taxation breaks to supply the market with upmarket expensive accommodation and the traditional suppliers are being priced out.”

IPOA chairman Stephen Faughnan said: “Neither the Government nor opposition has grasped the nettle which is causing the exit of thousands of property owners from the market.

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“Over the years the Irish Property Owners’ Association has outlined the causes of these much-needed investors leaving the market: taxation over 50 per cent, needless compliance, rent control, the abolition of the affordable bed-sit, and complicated legislation.

“All this has caused and will continue to cause homelessness and a shortage of affordable accommodation. Allowing all legitimate expenses to be offset in the year they occur would go a long way towards encouraging landlords to remain in the sector and new entrants to invest.”

Meanwhile, the Irish Homebuilders Association (IHBA) welcomed the announcement of the Budget, particularly the extension of the help-to-buy scheme.

James Benson, director of the IHBA, said the extension “will bring more certainty and help to hopeful buyers in securing the required deposit to obtain their residential mortgage.”

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