Latest news with #rentcontrols
Irish Times
02-07-2025
- Business
- Irish Times
Property tax must be used if we want to fix the housing crisis
Nothing encapsulates the cakeism at the heart of the housing shortage quite as well as property tax. Earlier this month the Cabinet signed off on the Local Property Tax regime for the next four years which will come into effect in November. Predictably, the increases will be small, and the purpose of the exercise seems to have been to ensure that people's tax bills do not go up in proportion to the 25 per cent jump in property prices recorded since rates were last set. Most homeowners – those with houses worth €525,000 or less – will see their bills increase by €5 to €23 a year. Those in the top band of €1.995 million to €2.1 million will pay an extra €389 a year. The Cabinet also approved plans to extend rent pressure zones whilst relaxing rent controls for new builds on the same day which hoovered up the headlines. It may seem to be politically expedient to leave property tax at its current relatively low level but from the perspective of tackling the housing crisis it represents a missed opportunity. Property taxes are a very useful tool by which governments can influence the property market and the behaviour of buyers and sellers in particular. Instead, we left it in the tool bag. READ MORE [ House price inflation reaches 10-year high as market remains 'starved' of supply Opens in new window ] The most obvious way in which the Government can use property tax to improve the supply of new housing through the utilisation of existing housing is to raise it to a level where empty nesting becomes unattractive. According to a study by the Economic and Social Research Institute (ESRI) published last year, two-thirds of us live in houses that are bigger than our needs, which is more than twice the European average. The figure rises to 88 per cent for people aged over 65. We seem to have arrived at this situation – where our homes are bigger than the rest of Europe's but have fewer people living in them – through a combination of cultural norms and a lack of attractive downsizing options. We have a clear preference for houses over apartments but there is something of the chicken and egg about this because historically we didn't build very many apartments. [ Older people and downsizing: 'We hated selling our home but it became a necessity' Opens in new window ] The ESRI duly noted that housing policies that 'incentivise and facilitate the construction of relatively smaller housing units will be an important part of the policy response' to the housing shortage. Building more one- and two-bedroom homes and apartments in the right sort of areas would clearly create a pull factor that would encourage downsizing and thus free up larger homes in urban areas. There is an obvious multiplier effect by which the construction of a two-bedroom apartment frees up a three- or four-bedroom house. The tweaks to the rent control legislation announced this month that exempt new builds from rent control will have negligible impact in this regard because most downsizers will most likely want to buy rather than rent. Which leaves us with property tax. One of the reasons people continue to live in their half-empty houses after the age of 65 – the point after which most are on a lower or fixed income, such as a private or state pension – is that they can afford to do so. The lack of a significant property tax is a factor, and there is plenty of research to show that property tax can be a powerful push factor for people in this situation to downsize. This is certainly the case in the US where comparisons between states with relatively high and low property taxes indicate that low taxes incentivise empty nesting, whilst higher taxes incentivise downsizing. It is neither desirable nor plausible to whack up property tax to force elderly retirees out of their homes, but making property tax a no-go area in the midst of generational housing shortage isn't very sensible either. [ Downsizing: The latest 'quick fix' to the housing crisis as the Government desperately looks for answers Opens in new window ] Nowhere in the Government's political calculations about the new LPT rates was the use of the tax as a push factor in terms of encouraging downsizing considered despite the obvious potential gains. The use of LPT to encourage downsizing would have to be part of a wider strategy obviously. Apartments would need to be built on a scale in existing residential areas for downsizing to be an attractive option. This in turn would require a planning system which put the common good before the legal antics of interested parties and bat lovers which seem to stymie many efforts to build apartments in suburbia. Sweeteners, such as tax breaks for downsizers, could also have a role to play. It would also require the Government to come to the realisation that they are more likely to lose their job because voters don't have homes than they are because they put up LPT rates.
Irish Times
30-06-2025
- Business
- Irish Times
Over 43,000 properties leave private rental sector
More than 43,000 properties have exited the private rental sector over the past five years, according to estate agent Sherry Fitzgerald, which said Ireland's 'stringent rent controls' are leading investors to seek more favourable markets. We have the story. In the right hands, artificial intelligence can clearly be a force for great good, but Pilita Clarke keeps coming across people who know how dire it can be in the wrong hands . In her column today, she talks about how there has been a distinct rise in the number of vastly more detailed, lengthy and outwardly credible correspondence to HR departments and employment tribunals since the arrival of ChatGPT. The problem is the information is not always accurate. Meanwhile, court-appointed liquidations in the first half of the year have more than tripled with enforcement actions linked to the conclusion of Revenue's debt warehousing scheme, according to a report by PwC. READ MORE In our Your Money Q&A , a reader asks if it is worth their while giving half of an inheritance received from a brother in law in the UK to their husband to avoid tax. Dominic Coyle offers some guidance. If you'd like to read more about the issues that affect your finances try signing up to On the Money , the weekly newsletter from our personal finance team, which will be issued every Friday to Irish Times subscribers. After some difficult trading years post the pandemic, Mayo-based Grace O'Malley Spirits is once again in growth , with an eye on emerging markets and plans for visitor centre in Westport. Hugh Dooley spoke with co-founder Stephen Cope about its resurgence. In his weekly column, John FitzGerald notes that while farm incomes rose substantially last year, the agri sector faces a likely drop in EU subsidies while also having to adapt to rules on climate change and land use. Retailer SuperValu is expanding into pet cover in bid to be 'one stop shop' for insurance. Hugh Dooley has the details. Elsewhere, US-founded artificial intelligence firm Partsol is to create at least 25 new jobs before the end of the year as it accelerates international expansion from its global headquarters in Dublin. In Me & My Money , Jerry Staple, founder of IntrinsicAI, outlines his view to Tony Clayton-Lea on investing: 'Time and compounding do the real work. Patience beats cleverness.' Why are Irish genetic tests still being sent to laboratories abroad? Paul Reid, managing director at Genseq , a commercial entity with an accredited clinical genetic testing laboratory in Dublin, offers a solution to that question in our Opinion piece . Nvidia is outpacing Microsoft and Apple on the path to a $4 trillion market valuation. Stocktake explains why.
Irish Times
30-06-2025
- Business
- Irish Times
Private rental sector has lost more than 43,000 properties over past five years
More than 43,000 properties have exited the private rental sector over the past five years, according to estate agent Sherry FitzGerald , which said Ireland's 'stringent rent controls' are leading investors to seek more favourable markets. Sherry FitzGerald's quarterly residential analysis reports a net loss of some 42,300 rental properties owned by private investors from January 2020 to the end of last March. 'This ongoing trend of landlords exiting the sector, which has been evident over the past decade, has become particularly pronounced in recent years, underscoring the mounting challenges faced by the rental market,' it said. This trend continued throughout the first half of this year, with only 9 per cent of second-hand homes purchased through Sherry FitzGerald bought by investors, while 31 per cent of properties sold were from investor vendors. READ MORE 'The depletion of small, private landlords from the rental market highlights the urgent need for increased investment in the private rented sector,' the group said. 'Recent legislative changes, such as the expansion of rental pressure zones nationwide and upcoming adjustments to the rent system in March 2026 – including allowing landlords to reset rents to market rates between tenancies – represent important steps forward.' However, it added that 'more comprehensive action is required' to make apartment construction more viable, especially to enhance supply within the rental sector. Sherry FitzGerald managing director Marian Finnegan said: 'Ireland's relatively stringent rent controls have led investors to seek more favourable markets in recent years. 'While the upcoming changes to rent caps for new-build apartments in March 2026 are a positive development, attracting the level of private capital necessary to meet the demand for 56,000 new units annually will require far more robust incentives.' [ Rent pressure zone changes will be painful for tenants, Central Bank warns Opens in new window ] Supply constraints in the rental market are 'mirrored in the broader residential sector', the group said, where a limited availability of second-hand properties continues to place upward pressure on prices. The estate agent's latest analysis of price trends confirms sustained growth in residential property values, primarily driven by the ongoing shortage of second-hand stock. Its analysis shows the average value of second-hand homes in Ireland increased by 1.6 per cent in the second quarter, bringing the total rise for the first half of the year to 3.9 per cent. Over the past 12 months, property values have risen by 7.4 per cent, further highlighting the ongoing challenges in the housing market. 'The persistence of price growth into the first half of 2025, despite global uncertainties, reflects the continued shortage of second-hand supply, which remains a key factor driving price increases in the residential market,' said Ms Finnegan. In Dublin, the average value of second-hand homes increased by 1.5 per cent in the three months to the end of June, with prices rising by 4.2 per cent in the first half of the year. On an annual basis, price growth in the capital reached 7.4 per cent. Outside Dublin, price growth was more pronounced in the quarter, at 1.8 per cent, resulting in an annual increase of 7.2 per cent. Cumulative price growth for the first six months of the year outside the capital stood at 3.5 per cent. A review of transaction activity for the first quarter showed 9,743 housing transactions by household buyers, a 1.4 per cent increase compared with the same period in 2024. However, activity in the second-hand market declined by 2.1 per cent, with about 7,833 second-hand units sold in the first quarter, reflecting the severe supply shortage in this segment. In contrast, the new homes market demonstrated strong growth, with a 19.3 per cent increase in transactions compared with the previous year. However, this amounted to just 309 additional units sold, bringing the total to 1,910 transactions. The Greater Dublin Area ( Dublin , Kildare , Meath and Wicklow ) remained the focal point for new housing activity, accounting for about 50 per cent of all new home transactions to the end of March.
BreakingNews.ie
18-06-2025
- Business
- BreakingNews.ie
‘You mislead people, you burn' – housing minister defends rent controls
The housing minister has accused the Opposition of whipping up 'false anger' over his housing proposals during a Dáil debate on extending rent controls nationwide. While warning opposition politicians of the dangers of misleading the public, James Browne drew comparisons with the far-right, populism and of a 'Faustian pact'. Advertisement Mr Browne also said: 'Because you mislead people, you burn.' The Government is being pressured again over its approach to solving Ireland's housing crisis, after announcing a swathe of new rent and housing measures. This includes the introduction of rent caps nationwide of 2 per cent or to inflation, whichever is lower. This will apply to around a fifth of tenancies not already covered and has been welcomed, but other measures have been criticised as a pathway to even higher rents. Advertisement Six-year minimum tenancies on offer from March next year have been criticised for allowing landlords to 'reset' rents to market value every six years or when tenants voluntarily leave a rental property. There have also been criticisms of rents in new developments being capped only by inflation, in order to attract investors in an attempt to boost the supply of apartments. The Fianna Fáil-Fine Gael government, supported by several independents, has insisted that boosting supply is the best way to encourage affordability, while opposition parties argue more state-owned homes and regulation is needed. While debating the Residential Tenancies (Amendment) Bill 2025, which will introduce nationwide rent caps this summer, the government and opposition representatives criticised one another over their housing stances. Advertisement Fianna Fáil's Catherine Ardagh accused Social Democrats TD Rory Hearne of a 'sanctimonious rant'. 'It's very difficult to listen to my friend's sanctimonious rant in relation to this,' the Dublin South Central TD said. 'I'm sure you are familiar, I think you are a lecturer in economics. We know from Junior Cert economics when you increase supply in the market, prices stabilise if not come down. 'It's economics 101.' Advertisement Fianna Fáil's Catherine Ardagh (Niall Carson/PA) She said the Bill would ensure 'fairness, certainty and protection' for renters across the country. Independent Galway West TD Catherine Connolly said she was inspired to speak during the legislative debate to respond to Ms Ardagh's comments. 'I can't think of anything more inappropriate from a TD (who is) part of the government that is standing over a housing crisis. 'The only sanctimonious (rant) that I've ever heard in this chamber has been from successive governments, as a tool and a weapon to obfuscate, to avoid, to confuse as a way to not analyse the problem.' Advertisement She criticised the 'chaotic, disorderly fashion' that the draft rent control laws were introduced to the Dail without pre-legislative scrutiny. 'We keep adding the pieces of the jigsaw with no picture – expect the picture of 'the market will provide'.' Green Party leader Roderic O'Gorman said the progression of the Bill was 'reckless' and said it was inevitable that problems would later come to light. 'I understand sometimes you have to work and move legislation rapidly, I've had to do it myself,' the former minister said. 'But this isn't rapid, this is reckless. 'I have no doubt that mistakes will come to light, in the debate here or in the debate in the Seanad, but because there isn't sufficient time to actually go through it in detail, to bring in the committee amendments, we will be bringing forward legislative amendments in the autumn term, I have no doubt about that.' People Before Profit TD Paul Murphy said the government believed in 'the magic of the market' and that by increasing rents now, they would come down in the long term. 'The government won't own its own proposals. They tell us that what you're doing is going to increase investment in the rental sector and that ultimately will bring rents down. 'But you refuse to say the bit in the middle, in terms of why is this going to increase investment in the rental sector, which is the plan is to raise rents.' Aontú leader Peadar Tóibín accused the government of an 'omni-shambles' in relation to rent controls and 'confusion' and 'chaos' over its latest housing measures. 'It really feels that this is amateur hour in relation to the government's approach.' Mr Browne hit back, accusing the opposition of a 'Faustian pact' and of whipping up 'false anger'. He said personal comments had been made in the Dáil but no solutions offered, and accused Sinn Féin of 'quietly shelving' their manifesto plan for 'a home you'll never own'. He also claimed the opposition had 'worryingly' misled the public about the timing of plans to introduce rent controls nationwide. He said a Bill cannot go on the Order Paper until it has government approval, which it secured last Tuesday. 'Yet here we have Sinn Féin and Labour and the Social Democrats, all who know the procedures, deliberately putting it out there that because it wasn't on the order paper it wasn't going to happen, and that suddenly there was some sort of fast change. 'That's the kind of politics we see from the far-right, and we see that introduced here now.' He said that it was dangerous to 'whip up a false anger' and said it was 'pure populism'. 'You were deliberately misrepresenting the procedures to, again, whip up a false narrative. It is deeply dishonest. 'It's a kind of a Faustian pact, we've seen Labour do that to get into government before, and you get in a Faustian pact to whip up anger to try and get into government … if you get into government on the back of that kind of whipping up anger, you see what happened to Labour the last time and that's what happens. 'Because you mislead people, you burn,' he said. It was agreed in the Dáil on Wednesday that the Bill would move to committee and final stages.
BreakingNews.ie
17-06-2025
- Business
- BreakingNews.ie
Government accused of making ‘an absolute hames' of rental reforms
The Government has been accused of making 'an absolute hames' of their rental reforms announced last week. Opposition politicians raised the rent controls issue at Leaders' Questions on Tuesday for the fourth time in a row. Advertisement Sinn Féin, Labour and the Social Democrats said the Government proposals would drive up rents and accused the coalition of sowing confusion. Taoiseach Micheál Martin said Ireland needed to boost its private rental and housing supply (Cillian Sherlock/PA) Sinn Féin leader Mary Lou McDonald said the average length of a tenancy was three-and-a-half years, and so the tenancy changes would be felt quickly. She said those who move between rental properties frequently for work or education will be 'hammered' by higher and higher rents. Taoiseach Micheál Martin said Ireland needed to boost its private rental and housing supply. Advertisement He said the reforms would provide 'stronger protections than ever before' and said Sinn Féin would have to vote for them. 'What will happen is that the contrast between the Sinn Féin hyperbole and what will happen when we put these legislative pieces through the House, will be a yawning gap.' He said that no existing tenant will have their rent increased under the measures, and said that the market reset under six-year tenancies introduced from March 1st next year would attract investment. Mr Martin said Sinn Féin aimed to reduce the size of the private rental sector. Advertisement He accused Ms McDonald of opposing up to 1,700 housing units in Clonliffe College and of not treating it like a housing emergency in her constituency. Ms McDonald replied: 'It might interest the Taoiseach to know that, far from having an ideological objection to rental accommodation, I was raised in rental accommodation. Imagine that.' She said it was not true that her party wanted to reduce the private rental supply and said her opposition was to renters being 'fleeced and gouged in the way that is currently happening'. Labour leader Ivana Bacik said that the Government's 'chaotic drip feed' of housing policies had caused uncertainty and confusion. Advertisement Mr Martin said supply needed to increase, and under his Government, 5,938 houses had been completed in the first quarter of the year. He said this was the highest rate since 2011, bar the spike after the Covid-19 pandemic. 'After 2026, linking new units to the consumer price index (CPI) as well as a right to reset after six years is the crucial piece that will allow inward investment in to get supply up,' he said. 'If we do not get supply up, then the rate at which prices will moderate will be slower.' Advertisement Social Democrats TD Jennifer Whitmore said the Government had 'made an absolute hames' of rental reforms announced last week. 'Even the Taoiseach's Cabinet colleagues could not make sense of them,' she said. 'That is because driving record rents even higher, according to the Government, is somehow going to bring rents down. Make that make sense. 'No wonder the Taoiseach's Cabinet colleagues are utterly bewildered.' Mr Martin responded: 'I reject the use of language like 'chaotic' and all that. 'Very few apartments have been built. We have a problem there and we need to attract private sector investment in to get the supply up.'
