Rent tax credit will be increased in budget, Taoiseach says

The renters’ tax credit will be increased in the budget, the Taoiseach has said, and fuel excise is also being examined.The scale of the increase will be closely watched as Ministers seek to finalise negotiations before Budget day on October 6th, with the Government also examining measures on energy and fuel.The renters’ tax credit was introduced in 2022 and has since been extended and increased up to a yearly maximum of €1,000 for an individual or €2,000 for a couple who are jointly assessed for tax.It was reported in the Irish Examiner that Minister for Housing James Browne is seeking to increase the credit by €300.READ MOREAsked on Monday if he supported an increase of that scale, the Taoiseach said the credit has been “positive” for renters. “We will be increasing it in the forthcoming budget,” Micheál Martin told reporters before Cabinet.“The only issue I’d have is some people are not availing of it, and that’s an issue that we need to really examine.”Tánaiste and Minister for Finance Simon Harris said there was a “need to help people with the cost of rent”, adding he was “positively disposed” to increasing the credit.Specifically asked if it would be increased by €300, Harris said: “It’s going to be a long 15 days (until the budget) if we’re going to go through every specific line of the budget and every specific amount inside the budget.”He said: “There will be tax measures in that budget. The bulk of the tax measures will go on a personal income tax.“There’s a tax package of around €1.5 billion. We all know any personal income tax package comes in at around €1.2-ish billion.“So, there’s a little bit left to do other things. The programme for government is clear – that’s what unites everybody in Government – that the renters’ tax credit is an area that should be increased if possible, and therefore we will look favourably upon that.“The level at which we do it is a matter for Budget day.”Harris also said there are a “couple of big calls” left in the budget negotiations, including the “profile regarding the excise restoration” for diesel and petrol, which is currently due to recommence in November.He said: “That may not be the prudent thing to do now if the current elevated prices continue. So we need to look at that.”Meanwhile on housing, Harris said abolishing stamp duty for first-time buyers would be a “bad measure” and a “tax cut for developers”.The idea had been put forward by Fianna Fáil’s Seamus McGrath and was backed by the Taoiseach.Harris said: “It would be a bad measure. That’s just not my view; it’s the view of the economists in my department. “You know, I’m old enough to remember when people tinkered with stamp duty in the past, and I’m old enough to remember the devastation that people lived through in this country. “That’s not the intention of everybody; everybody’s putting forward good ideas, everybody’s being constructive – but you don’t narrow the tax base; what you do is you increase supply. “And all of the economic evidence available to my department is that not one cent of a reduction in stamp duty would be passed on to a first-time buyer. It would effectively be a tax cut for developers.”Harris also said there are no proposals to increase the Help to Buy scheme in the budget.Elsewhere, Harris also raised the prospect of further measures on the fuel allowance and living alone allowance, as well as specific interventions for home heating oil.“I am really conscious that while people are talking about Iran and global issues, this is very real,” said Harris. “It’s the tank in people’s back garden that they’re worried about filling this winter, and we’re actively seeing what we can do.”Harris said another issue in the budget is potentially modifying carbon tax for specific products like home heating oil, as well as additional measures on energy transition like solar panel grants. – PA