Property agent and investor Jonathan Quinn of Quinn Bros Longford has cautiously welcomed the news that Section 23-based investors have received a reprieve in the Finance Bill, which is currently under negotiation in Dail Eireann.
"There is a definite requirement for caution," said Mr Quinn speaking to the Leader. "Fine Gael have made public statements stating that they intend to get rid of it."
The term Section 23 applies to a tax relief brought into law to enhance property investment in designated areas of Ireland. County Longford was one such designated area with most residential and rental properties sold since 2005 / 2006 falling into the Section 23 tax relief bracket. The proposed amendments to the tax relief would only have impacted rental investors and not those living in their properties.
"The Government knew that they were going to face legal action if they attempted to remove it," said Mr Quinn. "Some like to see this as a loophole, but it is in fact law and it would certainly be putting a lot of smaller investors into liquidation for a relatively small amount of money."
The Government had hoped to glean a further €60 million in tax revenue through the proposed Section 23 changes. In addition to the impact on small investors, Mr Quinn believes that the proposed move, had it been successful, who have injected an air of suspicion into the property market going forward.
"Property investors have had to face a lot of increases in their expenses. There is the €200 extra per year, the PRTB and the BER Certificate.
"Couple this with lowering rents and you can see that investors have been badly hit and it is therefore not surprising that many are in negative equity," said Mr Quinn.