Reaction to Budget 2024
Marian Finnegan, Sherry FitzGerald Group
“Budget 2024 a missed opportunity to address emergency in Rental market.”
Tuesday, October 10, 2023
Sherry FitzGerald broadly welcome the wide-ranging cost of living measures outlined today by the Government in Budget 2024. The continuation of energy credits as well as changes to the income tax brackets and USC bands will help to alleviate financial pressures for households, while the reduction in student fees and childcare costs are welcomed during these challenging times.
In relation to the property market, Sherry FitzGerald welcome the extension of the Help-to-Buy scheme to the end of 2025. Help-to-Buy as a measure has been crucial in underwriting supply and supporting first-time buyers to take their first step onto the property ladder.
That said, the failure to introduce any serious policies to combat the systematic problems in the rental sector is a missed opportunity and very disheartening. The number of properties available to rent has fallen significantly in recent years with private investors abandoning the buy-to-let market. For much of the past decade, for every single investor buying into the market, two are exiting, which will result in a loss of 15,000 tenancies this year alone. The introduction of a tax credit to landlords which sounds very positive, only equates to a saving of between €600 to €1,000, which will do little to encourage small landlords to stay in the market.
The increase in the tax credit for renters to €750, representing as it does, just over 4% of the average annual rent in Ireland, will have a limited impact on affordability. More importantly, it fails to address the crux of the problem in the rental market, a lack of supply.
Overall, Budget 2024 was a missed opportunity to address anomalies in the treatment of all investors in the rental market, including the existing onerous 10% stamp duty charge for the cumulative purchase of 10 or more residential houses in a 12-month period and the many impediments for private individual landlords.
The reintroduction of mortgage interest relief, which is capped at €1,250, for homeowners who have been most impacted by interest rate increases over the past 14 months is welcomed. That said as it is limited – only applying to the additional interest paid in 2023 over 2022 - it will be a marginal benefit.
Additionally, the Government has committed to increasing the vacant property tax to five times the current rate of LPT, which is laudable in its intent. However, it is unlikely to return a substantial amount of stock back to the market.
In conclusion, Ireland is in the midst of a severe housing emergency and there is little in Budget 2024 to alleviate this immense challenge for the Irish economy and its citizens.
ENDS
For any further information, please contact:
Jill O’Neill
PR Director
Sherry FitzGerald Group
Ph: 01 2376 500 / 086 252 3277
Marian Finnegan
Managing Director
Sherry FitzGerald Residential & Advisory
Ph: +353 86 814 8251
