806. Deputy Michael Healy-Rae asked the Tánaiste and Minister for Finance if he acknowledges that the current taxation treatment of rental income is a significant barrier to the viability of smaller private landlords and is contributing to landlords exiting the rental market; and if he will make a statement on the matter. [63050/26]

807. Deputy Michael Healy-Rae asked the Tánaiste and Minister for Finance if he will consider targeted taxation reform for small and medium-sized private landlords as part of Budget 2027, with a view to improving the viability of the sector and protecting the supply of private rental accommodation; and if he will make a statement on the matter. [63051/26]

I propose to take Questions Nos. 806 and 807 together.

Landlords are an essential feature of a functioning housing market. Rising rents are driven by a shortage of supply, so stabilising and increasing the supply of rental properties should ease upward pressure on rental prices and make it easier for prospective tenants to find affordable homes.

It is a general principle of taxation that, as far as possible, income from all sources should be subject to taxation. Ireland has a progressive income tax system which is structured such that the more income you earn, the more tax you pay.

Notwithstanding this, section 21 of Finance (No. 2) Act 2023 introduced the Residential Premises Rental Income Relief (RPRIR). It is an income tax relief at the standard rate of income tax for individual landlords of rented residential property. The purpose of this relief is to provide an incentive for landlords, specifically targeted at attracting and retaining small-scale landlords in the private sector.

The relief is as follows:

• €3,000 in the tax year 2024;

• €4,000 in the tax year 2025;

• €5,000 in the tax year 2026 and

• €5,000 in the tax year 2027.

This equates to a tax credit of up to €600 in year one, €800 in year two and €1,000 in years three and four. The relief is capped at the individual’s tax liability on rental income from residential property. The credit is available to individual landlords of residential rental properties.

The RPRIR is scheduled to sunset at the end of 2027. The Programme for Government commits to "continue the landlord tax credit".

In relation to the residential rental market more generally, the taxation of rental income was considered by my Department as part of the 2022 Tax Strategy Group process. (Further details set out in chapter 7 of the "Property-Related Tax Issues Tax Strategy Group – 22/04 July 2022" paper, available at the following link:

https://assets.gov.ie/static/documents/tsg-22-04-property-related-tax-issues-4b78c888-4c5a-4642-9f8b-5a28c181ee1a.pdf)

My Department continues to monitor all aspects of the property market, and I will continue to work with my colleagues in Government to ensure that any further interventions in the housing market are appropriately calibrated, represent the best use of scarce public resources and boost the supply of housing in both the public and private sectors.

Finally, and as the Deputy will appreciate, decisions regarding taxation measures are made in the context of the annual Budget and Finance Bill processes, at the appropriate time, and having regard to the sound management of the public finances and the impact any proposed changes would have on the wider housing market. It is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax matters which might be the subject of Budget decisions.