Wednesday, September 28, 2022

Small landlords say rules and taxes are forcing them out of the rental market

Small landlords say rules and taxes are forcing them out of the rental market

The landlords claim to have constantly changed regulatory rules and high taxation leading to mass exodus of landlords from the region.

And they have hit out at rent-pressure zone (RPZ) rules, claiming they are creating a two-tier rental market.

They say that RPZs, brought in to control rent inflation, create a situation where the maintenance of quality housing is not economically justified, he says.

Landlords said the rules limiting rent are also impacting the capital values ​​of their properties.

The Institute of Professional Auctioneers and Valuers (IPAV) and the Irish Property Owners Association (IPOA) state that just one new homeowner is entering the market for every two sales.

Both the bodies said that landlords who are leaving the market in large numbers are likely to charge rent under the historically market rate.

RPZs limit them to minimal growth.

These landlords are replaced by new properties with much higher rents in the market and are owned by institutional landlords.

IPAV and IPOA stated that there is no evidence to confirm whether any net additional new assets have entered the rental system.

“Fare pressure zone regulation has prevented fares from falling and exceeding set limits,” said IPAV chief executive Pat DeWitt.

He said the private landlord has traditionally been a mainstay of the Irish rental market.

According to Daft.ie, the private rental market is in trouble, with rents rising 12 percent in the past year.

According to the latest report from Daft.ie, the average monthly rent nationwide is now €1,567. This is more than double the low of €765 per month seen at the end of 2011.

At the beginning of the month, only 851 homes were available for rent across the country, up from 3,600 a year ago.

The state regulator, the Board of Residential Tenancy, says 5,617 termination notices have been issued by landlords since 2019.

Mr. DeWitt Small-scale landlords were being sacrificed in favor of international wealth.

He said there is a huge gap between how the state treats private and institutional landlords.

“We need both but they deserve equal and fair treatment and policy makers need to work on that. Otherwise future rent levels will be determined by the kind of market forces that we have experienced historically and higher by trends in complex global property investment vehicles,” he cautioned.

Small landlords are required to pay up to 52 percent of the rental income, which is paid back to the treasury in PRSI and USC.

In contrast, institutional landlords make significant profits in the Irish market, but pay no taxes.

According to a report for IPAV and IPOA by economist Jim Power, dividends paid to shareholders are subject to tax, but investors who are non-residents have no return to the treasury.

Mr. DeWitt said there are no fairly accurate figures on how many leases and landlords are currently active in the market.

This is because where tenants leave of their own accord or leave because the property is being sold, such leases can still be recorded as active leases in the RTB figures.

Stephen Fognan, president of the Irish Property Owners Association, said there was

“Exodus of private landlords from the market in large numbers”.

“Issues such as punitive tax rates and a tax code that discriminates against private landlords in favor of large institutional funds, together with an ever-changing and ever more complex regulatory environment are all against investment in the private rental sector,” he said. said.

He said that the residential tenancy board shows that private non-institutional landlords are the largest established landlords in the market.

Nation World News Desk
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