Minister for Finance Michael McGrath described housing as "undoubtedly the biggest domestic challenge we face today" as he announced a range of measures aimed at tackling the housing crisis as part of Budget 2024.
However, the Opposition were quick to point out that the measures do not go far enough, claiming "entire generations have been locked out of home-ownership" due to the Government's approach to housing.
In his budget speech, Mr McGrath confirmed the €500 rent tax credit announced in Budget 2023 will be increased to €750 for 2024. He added that parents of students in 'rent a room' or 'digs' accommodation will also be able to avail of the rent credit.
He followed up by announcing a one-year mortgage interest tax relief for mortgage-holders, which will apply to those with an outstanding mortgage balance on their primary dwelling of between €80,000 and €500,000 as of December 31st, 2022. The measure will allow them to claim tax relief on the amount by which their mortgage interest increased in 2023 compared to the previous year at the standard rate of 20 per cent income tax, capped at €1,250.
For those looking to get on the property ladder, the Minister said the Help-to-Buy scheme will be extended to the end of 2025, adding that he will "consider across next year if any changes are required to the scheme". The scheme's criteria will also be amended so local authority affordable purchase scheme applicants will also be able to avail of the Help-to-Buy scheme.
Energy credits
A welcome note for all households will be the energy credits, which will come in the form of three €150 payments between the end of the year and April 2024.
There were also targeted measures for landlords, aimed at keeping properties in the rental market over the next number of years.
Mr McGrath said a new temporary tax relief will be offered to landlords, allowing them to disregard some rental income each year for the next four years at the standard rate. The disregarded amount will begin at €3,000 for 2024, before increasing to €4,000 in 2025, and then to €5,000 in 2026 and 2027.
However, the relief will only be available on the condition that the property remains in the rental market for the four-year period, "otherwise the full amount of the relief will be clawed back," Mr McGrath said.
Another aspect of the Government's plan to boost housing supply is by bringing more vacant and derelict homes back into use, for which Mr Donohoe confirmed €207 million will be spent on regeneration projects.
In addition, Mr McGrath confirmed the vacant homes tax will increase to five-times the property's existing basic local property tax rate from the next chargeable period, beginning in November.
On the building front, Mr Donohoe said €1.9 billion will be spent next year on delivering 9,300 social homes, and €265 million will go to providing 6,400 affordable housing units.
'Locked out of home-ownership'
Responding to the measures, Sinn Féin's finance spokesperson Pearse Doherty criticised the Government for not making housing the budget's number one priority.
"We needed a budget for renters, instead we got a budget for landlords," he told the Dáil.
"The housing crisis is the Government’s greatest failure and ending the housing crisis is Sinn Féin’s number one priority," he added.
"Delivering the biggest public housing programme in the history of the State is Sinn Fein’s number one priority.
"It needed to be the number one priority of this budget, but under this Government, entire generations have been locked out of home-ownership.
"More than two-thirds of our young people are forced to live with their parents and more of them are reaching the conclusion that their future is not here, but elsewhere."
"Shame on you for not changing course and setting a path to make things right in this budget," Mr Doherty said.
Also responding to the housing measures, homelessness prevention charity Threshold welcomed the expansion of the tent tax credit, but added it is disappointed that a sliding-scale system for tax rental income was not adopted in order to increase security for renters.
The group added the support should be easy to claim by renters whose landlord's have not registered the tenancy.
"While the increase in the rent credit to €750 is welcome, only an increased supply in affordable housing, across social, cost rental, private rental and for purchase, will see renting become more affordable and secure," Threshold's chief executive Jack Mark McCafferty said.
"While we anticipated changes to the taxation of rental income, we made it clear this would need to be a targeted measure done in exchange for increased security of tenure, otherwise it has the potential to be a deadweight cost to the State.
"As currently designed, it will remain to be seen if the tax relief measure for small landlords incentivises more of them to stay in the market or not – and provide increased security for renters – and that is something that needs to be closely monitored," he added.
