Peter McVerry Trust calls for tax breaks for landlords in return for rent freezes for tenants
The Peter McVerry Trust has called for the introduction of tax breaks for landlords in return for rent freezes for tenants. It is is backing an initiative that was proposed by financial analyst and commentator Karl Deeter which could help reduce pressure in the rented sector by giving landlords tax breaks in return for rent-freezes. The suggestion would encourage landlords to introduce rent freezes for at least two years, by offering them tax incentives. If adopted the measure would allow landlords to get full mortgage interest relief and offset their local property tax against Revenue obligations, in return for giving the tenant a ‘rent freeze’.
The Peter McVerry Trust believes that emergency rent controls are needed until such time as the market undergoes fundamental reform and the issues surrounding future residential supplies are addressed. Fr Peter McVerry SJ recently called for the Department of the Environment to bring forward emergency legislation to freeze rents in the private residential rental market. Describing the current state of homelessness as ‘an emergency’, Peter explained why he believes the government need to introduce such measures now. “Homelessness has been in crisis for at least two years,” he remarked, “and now it’s beyond crisis. The numbers are just going up and up and up. For example, in January this year there were 410 families in emergency accommodation. In July there were 659 families in emergency accommodation… The problem is just getting worse, and I see no measures being taken to address that problem in the short-term.”
Speaking on Morning Ireland on RTÉ Radio 1 on Wednesday 19 August, Peter outlined the reasons for the current crisis. He said that the primary cause of homelessness at present is the increase in rents in the private rental sector. He went on to explain how 90% of the new people becoming homeless were formerly tenants who have now became homeless because they were unable to meet the cost of rising rents. “The rents have gone through the roof, people can no longer afford them”, he explained. Peter also cited the number of homes that are being repossessed by financial institutions as a reason for the current crisis, particularly the buy to let properties. “When the banks take over a buy to let the tenant who is renting that house gets turfed out so I think that’s the primary cause and that has to be addressed”, he said.
According to Peter there are two important aspects that need to be addressed in relation to the current crisis. Firstly, helping those who are currently homeless to find accommodation, and secondly, and more urgently in Peter’s estimation, trying to prevent more people and more and more families floating into homelessness. Peter says that introducing a rent freeze is ‘one particular measure’ but that it will take time to pass legislation; and the introduction of other measures, particularly an increase in the rent supplement is also necessary. “We have to increase the rent supplement, there’s no question about it. The rents nationwide in the last three and a half years have gone up by an average of fifty euro per week, in Dublin they have gone up by over ninety euro on week on average, and the and the rent supplement has been reduced by 28%. There is just no correlation now between the rent supplement and the rents that are being demanded by the landlords”, he explained.
Stating that ‘we have an emergency’, Peter outlined how ‘The Peter McVerry Trust’ along with Threshold, Focus Ireland and the Simon Community have been consistently calling for the government to introduce rent freezes. He mentioned in particular the large number of families that are currently homeless and predicted that this figure would increase if measures are not introduced to address the present crisis. “The way the numbers of families going homeless are going…in maybe six or seven months time you’re going to have a thousand families who are actually homeless. There are not one thousand hotel bedrooms available for one thousand families. Many of them are going to find themselves unable to access accommodation”, he said.