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mat109

The Irish are scrapping "section 24" - lies

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Quote

The deduction for interest accruing on loans used to purchase, improve or repair rented residential property is restricted to 75% of the interest accruing. From 1 January 2016, a 100% interest deduction is allowable where residential property is let to tenants in receipt of certain social housing supports for a period of 3 years. 

http://www.revenue.ie/en/tax/it/leaflets/tax-relief-source-mortgage-interest-relief.html

Certain social housing supports - what, like those housing benefit tenants landlords are so keen on? 

So - they actually haven't scrapped it at all for most of the market, just at the bottom end and with strings attached.

This subtlety is totally ignored in the media.

The BTLGraph http://www.telegraph.co.uk/investing/buy-to-let/irelands-scrapping-of-buy-to-let-tax-is-warning-to-britain/ make no mention of that small detail.

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Nice digging but unfortunately I think your quote probably refers to current arrangements whilst the article refers to arrangements from April 2017 onwards, as per Ireland's Budget 2017 Financial Statement delivered in October last year:

Quote

Interest deductibility for residential property landlords was restricted to 75 per cent in 2009 as part of the measures introduced to rescue the public finances. It is an appropriate time to revisit this measure in the context of the housing crisis. In light of the incentive I introduced last year to support landlords who let their property to social housing tenants for a minimum period of three years, I am going to restore full interest deductibility for other landlords on a phased basis and my first step is to increase the level from 75 per cent to 80 per cent in 2017. I will increase it by instalments of 5 per cent until the full 100 per cent, deductibility, is restored.

Having said that I don't think the fact that Ireland have gone down this route means anything at all for where the UK government are heading, given we are different countries taking very different paths, though it does have the potential to provide further interesting data.

For instance, if there were anything at all in the rents shall rise mantra then reintroduction of full deductibility should result in a clear fall in Irish rents, independent of wider economic conditions and directly correlated to the stepped reintroduction. If that doesn't happen then it will in fact support the opposite view that rents are not defined by landlords' costs, which might even encourage further reductions in landlord tax reliefs here in the UK. ;)

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