Taoiseach Leo Varadkar has insisted that measures in the 2024 Budget will benefit the lowest- paid people in society, amid criticism of a newly announced tax relief for landlords.
The Budget announced a range of one-off cost-of-living payments, as well as two new funds that will use Ireland’s multibillion-euro windfall from corporation tax receipts to invest in future priorities such as climate change.
The €14 billion package revealed on Tuesday also included a temporary tax relief to benefit small landlords.
Sinn Féin’s finances spokesman Pearse Doherty described the measures as a “Budget for landlords”, while Social Democrats finance spokeswoman Roisin Shortall said the Government’s housing policy is a “litany of failure”.
Mr Varadkar said the tax relief that could see landlords saving €600 in the first year, ultimately rising to €1,000 per year, was to stop them from leaving the housing market.
“It’s really to help encourage small landlords to stay in the market, and they’re the ones who are leaving,” he told RTÉ.
“It does nothing and just for the big commercial funds and landlords, this is for the small, one house, one apartment landlord and essentially, they’ve been leaving. That’s one of the reasons why there’s a lack of supply.
“And this is to encourage them to stay in and bear in mind they don’t get any money at all if they don’t stay. It’s a tax credit but it’s clawed back if they sell off in the next four years.”
He added: “There’s help for renters too, let’s not forget so we’re increasing the rent credit to 750 euros per person, 1500 for a couple – that’s roughly a month’s rent, on average.”
The Taoiseach said that despite some Budget measures benefiting all income levels, others were specifically targeting the lowest earners.
“There’s a mix of measures, some that are universal that everyone will benefit from, there are others that are very much targeted at those who need the help the most,” he said.
“So for example, an increase in the minimum wage, a 12.8 per cent increase in the minimum wage, way ahead of inflation and think of the difference that could make for the lowest paid people in our society.
“And then other very targeted measures, for example, which we think will help particularly around student contributions.”
The Budget includes a one-year tax relief on mortgage interest payments that will benefit 165,000 mortgage holders at a cost of €125 million.
Mr Varadkar said that the mortgage interest relief programme would not be universal.
“So most mortgage holders will not benefit from this. It is targeted,” he said.
“It’s really helping people who’ve seen a significant increase in the amount of interest they’ve had to pay in the past year, and then it’s capped at €1,250.”
The Taoiseach stated the approach taken by the government in Budget 2024 is “the right thing to do” and that it would not contribute to continuing high inflation.
“We are confident inflation will continue to fall. We think it would be around 3 per cent next year, and we have done things that I think are very significant,” he said.
“We’re using some of the surplus to pay down the debt, and we’re also setting up two funds for the future – one to pay for future pension costs that we know are going to rise, the other to make sure that if there’s a downturn in the future, we have money set aside for infrastructure, so we get out of that start-stop cycle of investment in things like social housing and transport and roads and schools.”
By Claudia Savage
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