Generation Rent will remain Generation Rent following Budget 2019. Aside from a nominal increase in take home pay, those trapped in the rental market as they are unable to afford their own homes will see little in Paschal Donohoe’s budget speech that will improve their situations.
For those hoping to buy, the Minister of Finance said “more new homes will be provided this year than in any year in the past decade”.
A land development agency has been established to coordinate state lands for regeneration and development, but there were no measures introduced that will make it easier for people who are renting to buy.
For Generation Rent, Budget 2019 has made home ownership seem further away than ever
As well as that, renting will still remain an uncertainty as Budget 2019 offered nothing to encourage landlords to offer longer tenancies. This is unlike what is expected to be introduced by the British government next month. That measure in Britain will allow landlords to sell properties to tenants who have lived there for three years or more without paying any capital gains tax. This will encourage landlords to keep the same tenants for longer, and will help the next generation get on the property ladder.
No such luck for Irish tenants, but while they will be unhappy with Budget 2019, their landlords are being taken care of. Donohoe’s budget brought forward the full removal of the restriction on the amount of interest that may be deducted by landlords in respect of loans used to purchase, improve or repair their properties. Although it was due to be 100 per cent by 2021, this will now apply from January 1, 2019.
What will that mean for tenants? Well, it might actually be bad news for those in rent pressure zones. While landlords in these areas can impose a maximum rent increase on existing tenants of 4 per cent a year, they can get around that by undergoing a “substantial change in the nature of the accommodation”. And the government has just made it cheaper for them to upgrade their properties.
For Generation Rent, Budget 2019 has made home ownership seem further away than ever. Fancy cheering yourself up with a nice meal after the budget? Act fast, the Vat rate on hotels and restaurants will go up from 9 per cent to 13.5 per cent in January, so it looks like the price of avocado on toast will go up too. Millennials can’t catch a break.