'Urgent reformation' of property tax needed to revitalise market

Eva Osborne

The Irish Property Owners' Association (IPOA) has said there is an urgent reformation of property taxation needed in Budget 2026 to revitalise the property market.

In its pre-budget submission for 2026, the IPOA proposed a number of practical measures to "level the playing field" for landlords and make the rental market more sustainable.

The association's key asks include:

• Taxing rental income the same as income to a trading business;
• Abolishing close company surcharge;
• Increasing the number of allowable claims under the Residential Property Rental Income Relief (RPRIR);
• Expanding the range of expenses for tax deductibility for landlords, including Local Property Tax.

Despite the fact that many small landlords are dependent on rental income as their main income and business, business expenses in the rental industry are treated differently to other industries, the IPOA said.

The association said changes such as affording landlords the same access to tax deductible expenses as sole traders and allowing Local Property Tax as a business expense would go a long way to rejuvenating viability of the market.

The IPOA also backs a tiered relief system for RPRIR allowance that reflects the reality of the market.

As of Q4 2024, 72% of all landlords had only one or two tenancies, and 79%, or 83,031 had 3 tenancies or fewer. As such, allowing the RPRIR credit to be claimed for up to two or three tenancies would provide a benefit for the vast majority of landlords, the IPOA said.

The IPOA is also calling for the Government to introduce a limited, trial-based investment scheme aimed at attracting individual investment into the rental sector, taking learnings from the overextension and unsuitability of previous tax relief schemes.

Chair of the IPOA, Mary Conway, said: “It is clear that radical changes are needed to stabilise the apprehension in external investment in the Irish property market and to accelerate progress in housing delivery.

"As the national voice for private residential property owners, the Irish Property Owners' Association has a deep knowledge of the sector, and we believe that these proposals are urgently needed to inject fresh energy to the market.

"With uncertainty, rising costs and inflation, it is imperative to reform taxation of landlords in recognition that letting of residential property is a legitimate and important business activity. Meaningful supports, incentives for investors, and fair tax treatment will go a long way towards stabilising the rental supply, and in turn, controlling rising rents."