IPOA members and thousands of other investors breathed a sigh of relief during the week on hearing the news that proposals to phase out Section 23 of the finance bill have been put on hold until at least 2012.
In December’s Budget, Minister for Finance Brian Lenihan announced that property-based reliefs were to be phased out which included the controversial Section 23 tax relief on rented residential property in tax-designated areas. This would mean that for those who bought investment properties during the boom time would now only be able to offset rental income from the Section 23 properties and no other, previous to this you could offset from any rental income in the State.
The Chairman of the IPOA, Stephen Faughnan welcomed the reprieve saying “We cannot allow investors to be treated like 'Lambs to the Slaughter' on this…Investors paid dearly for properties in the clear expectation that incentives encouraged by the Government could be trusted to run their course.”
However there has been little or no sympathy from many householders who were “suckered into 100% mortgages at extortionate rates”, have also had their reliefs taken from them and are now also facing big financial burdens if they can’t keep up with their repayments or if interest rates begin to rise. “Even if landlords only own one or two extra properties they are among those culpable for what went wrong with the banks in our greedy decade.”
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