The Law Society of Ireland has called on the Government to introduce tax measures to improve housing and accommodation supply in Ireland.
In its Budget 2023 submission to the Department of Finance, the Society also outlines measures to help tackle climate change and keep Ireland competitive internationally.
John Cuddigan (chair of the Society’s Taxation Committee) said: “In light of the housing and accommodation crisis we are facing, innovative measures to preserve existing housing supply, as well as creating new housing supply, should be central to any fiscal policy."
‘Living city’ extension
The organisation wants the Government to broaden the scope of the Help to Buy scheme for home ownership to include refurbishments of existing properties that exist in many town centres. It also wants the scheme extended until the end of 2023.
The Law Society is also calling for a further three-year extension of the qualifying period for the ‘living city initiative’, with the scheme also extended to larger towns to reinvigorate their centres.
“We also propose measures to encourage the retention of landlords offering properties at sub-market rents in the rental market, as well as offering security to tenants in the private-rental sector,” said Cuddigan.
Under the Society’s proposal, income tax relief would be considered for landlords who let properties at rents at, or below, 75% of market rents.
The organisation also proposes an ‘opt-in’ model for the private-rental sector, under which landlords who agreed to provide longer-term leases that included longer security of tenure, and rent increases linked to inflation, would receive a reduction in rental income liable for tax.
The Law Society’s recommendations on climate change include incentives to retro-fit housing stock, and CGT (capital gains tax) relief to encourage renovations of older properties in the rental sector.
“Tax incentives have the power to change behaviours, and Ireland now has an opportunity to position itself as a leader countering climate change. This Government needs to take hold of this opportunity to maximise public and climate benefit,” Cuddigan stated.
On competitiveness, the submission proposes a series of tax changes – including a revision of what it describes as an “unnecessarily complex” regime for the taxation of foreign dividends.
The Law Society also calls for an exemption to a withholding-tax charge on interest paid by Irish companies to Irish companies, so that interest can be paid without withholding tax. It argues that this would bring Ireland into line with the UK, and encourage the free movement of capital within Ireland.