Tax reforms needed in Budget 2025 to prevent 'rental market collapse'
Eva Osborne
Tax reforms are required in Budget 2025 to prevent a rental market collapse, according to the Irish Property Owners Association (IPOA).
The IPOA is urging the Government to introduce tax reforms and review current rental regulations to address the mass departure of property owners from the rental market.
The association maintains that a lack of meaningful changes aimed at rebalancing the rental market will exacerbate the housing crisis, driving up rents and reducing the availability of homes.
Its Budget submission highlights key taxation reforms, including an extension of Capital Gains Tax (CGT) relief, a reduction in Capital Acquisitions Tax (CAT) for inherited rental properties, business taxation for private landlords, and the introduction of a standard 25 per cent tax rate on all rental income.
The IPOA contends that these measures aim to support property owners who provide a critical service to Ireland’s strained housing sector, while encouraging new investment in the private rental sector.
It is also calling for flexibility in the application of Rent Pressure Zones (RPZs) and indefinite tenancies which they deem “unworkable for many private landlords and are only serving to drive the landlord exodus".
The Budget submission highlights the alarming decrease in rental supply, with registered tenancies falling from 308,786 in 2022 to 264,235 in 2023 – a direct consequence of landlords exiting the market.
The IPOA said this is evidenced by the Department of Housing’s Private Rental Sector Review in July 2024 which showed a 41 per cent loss in landlords over 26 months, from 172,027 in September 2021 to 101,107 by December 2023.
Chair of the IPOA, Mary Conway, said: "The private rental sector is in crisis, with landlords leaving at an alarming rate due to a punitive tax system and excessive regulations. The reality is that investment in private residential property is increasingly unviable for private property-owners.
"Given our association’s deep knowledge of the sector we have curated targeted budgetary proposals aimed at encouraging landlords to remain in the market, while stabilising rental supply and helping to control rising rents. This will ultimately benefit tenants and ensure a more balanced and functional rental market.
“The IPOA stresses that without immediate action, Ireland's rental market risks collapse – a situation that can be avoided with meaningful supports.”
