Smaller landlords say regulations and taxes are pushing them out of the rental market
LANDLETTERS have claimed ever-changing regulations and high taxation are responsible for a mass exodus of landlords from the sector.
And they have bucked the Rent Pressure Zone (RPZ) rules, claiming they are creating a two-tier rental market.
The RPZs, created to control runaway rental inflation, are creating a situation where maintaining quality housing is not economically viable, they say.
Landlords said the rent cap rules also affect the capital value of their properties.
The Institute of Professional Auctioneers and Valuers (IPAV) and the Irish Property Owners’ Association (IPOA) say only one new landlord enters the market for every two sellers.
The two panels said the landlords exiting the market in large numbers are likely to be those historically charging below market rents.
RPZs limit them to minimal increases.
These landlords are being replaced on the market by new properties owned by institutional landlords at much higher rents.
IPAV and IPOA said there was no evidence whether more new properties had entered the rental scheme.
“Rent pressure zone regulation has prevented rents from falling and rising beyond set limits,” IPAV chief executive Pat Davitt said.
He said the private landlord has traditionally been the mainstay of the Irish rental market.
The private rental market is in crisis, with rents soaring 12 percent over the past year, according to Daft.ie.
Average monthly rents across the country are now €1,567, according to the latest report from Daft.ie. That’s more than double the month’s low of €765 in late 2011.
At the start of the month, there were only 851 apartments available for rent across the country, down from more than 3,600 a year ago.
She has been issued 5,617 notices of termination by landlords since 2019, according to the state regulator Residential Tenancies Board.
Mr. Davitt, small landowners have been sacrificed for international money.
He said there is a big difference between the state’s treatment of private and institutional landlords.
“We need both, but they deserve to be treated equally and fairly and policymakers must do so. Otherwise, future rent levels will be dictated less by the market forces we’ve seen in the past and more by trends in complex global real estate investment vehicles,” he warned.
Small landlords must pay up to 52 percent of rental income back to the state coffers in PAYE, PRSI, and USC.
In contrast, institutional landlords in the Irish market make substantial profits but pay no taxes.
Dividends paid to shareholders are taxable, but since many investors are non-resident, there is no return to the Treasury for IPAV and IPOA, according to a report by economist Jim Power.
Mr Davitt said there are no current accurate figures on how many tenants and landlords are currently active in the market.
This is because when tenants move out of their own accord or move out because properties are being sold, such leases can still be recorded as active leases in RTB figures.
Irish Property Owners’ Association chairman Stephen Faughnan said that was the case
A “flight of private landlords from the market in large numbers”.
“Issues such as punitive tax rates and tax legislation that discriminates against private landlords in favor of large institutional funds, as well as the ever-changing and increasingly complex regulatory environment, all speak against investing in the private rental sector,” he said.
He said the Residential Tenancies Board shows private, non-institutional landlords are by far the largest landlords in the market.
https://www.independent.ie/business/personal-finance/smaller-landlords-say-rules-and-taxes-are-forcing-them-out-of-the-rental-market-41662237.html Smaller landlords say regulations and taxes are pushing them out of the rental market