Budget 2023: ‘Anyone who is renting a property now is in serious, serious trouble’

Galway City West Councillor warns tax credits for renters in Budget 2023 without a rent freeze is ‘simply nonsensical’

“Anyone who is renting a property now is in serious, serious trouble”.

This is the opinion of Labour Galway City West Councillor, Niall McNelis, who has criticised Budget 2023 for not doing enough for renters.

This year’s record budget of €11 billion, included a €500 tax credit for renters. However, speaking to Galway pulse, Councillor McNelis explained the €500 tax credit “is very little”, especially without an emergency rent freeze.

“Without a rent freeze, this credit will be gobbled up by rent increases. To protect people this winter we need a rent freeze and eviction ban.”

The average rent in Galway City has increased by €220 per month over the last 12 months, according to the latest Daft.ie report. This represents an annual increase of €2,640. This means that the €500 tax credit will only cover just under 20% of the rent increase.

Councillor McNelis pointed out that nationally, “a €500 tax credit for renters is not really going to do much for the hundreds of thousands of renters paying an average of €20,000 for their rented home. That’s roughly a 2.5% dig out. Everyone knows rents rose by about 12.5% last year, so the €500 tax credit is very little. Low-income workers get absolutely nothing from this because we have rising costs all of the time, in other areas.”

Councillor McNelis stressed this is problematic for Galway, “because of the fact there is such a young, working-class population, on low-income jobs and a large number of students.

“I really do believe in what Labour leader Ivana Bacik said about this Budget. It is very much a treadmill budget. The government are spending money to run in the same spot. They are not moving forward.”

Building homes

Speaking about the housing crisis as a whole, Councillor McNelis said, he is struggling to see how anything in this Budget will help alleviate the pressure on housing.

“I don’t see anything in this budget for the housing crisis. There is no real incentive there to build houses.

“The only way to solve a housing crisis is to build houses. But what we are doing instead is relying on the likes of Tuath, Clúid, the Peter Mcverry Trust to do this for us.

“We are over relying on the private rental market to sort out the mess we are in. We’re also over relying on purchasing houses from the private market, which pushes up the price.”

Concrete block levy

The issue of increasing prices took another turn as a concrete block levy was announced as part of Budget 2023 measures.

A 10% levy will be introduced on concrete blocks, pouring concrete, and other concrete products. This will help pay for the Mica redress scheme.

However, Councillor McNelis said: “all that is going to happen is the extra cost will be added on to the young family or individual. They have scraped together enough money to build their own house, to get themselves out of the housing crisis.”

He stated, we already have an issue with lack of housing supply and a levy on concrete is only going to fuel the problem.

“What Labour has suggested is we tax the developer. The one that was going to make huge profit anyways. That’s the person we should have been going after in the first place.”