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The Federation of Estate Agents welcomed the pre-budget document which should help to boost the economy and investment, the federation said.
The Federation, however said it was disappointed that there is no reference to a withholding tax on property rentals. “This would replace the high 35% tax on rental income, which, along with the also high MTA licence fee on long lets, is rendering the rental of property a financially non-feasible activity for property owners,” the Federations said.
This suggested change in taxation and licensing would also increase government revenue, hence creating a win-win situation. A final withholding tax on rental income would encourage more local and overseas investment in property. This, at a time when the introduction of the Euro should increase substantially liquidity, in the absence of suitable local investment opportunities, this newly available money might be invested overseas to the detriment of the local economy.
“A final withholding tax would result in more property coming on the rental market to meet demand by first time buyers who are unable to purchase their first home. The Federation reiterates its belief that the final withholding tax of 12% on property should also be amended this budget so as to eliminate the five year limit on choice between the 7% provisional and 12% final tax. The limit should be done away with, thus allowing the freedom to choose tax option irrelevant of length of ownership of the property,” FEA said.
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