To ask the Minister for Housing; Planning and Local Government the estimated cost of establishing a national deposit scheme; and if he will make a statement on the matter.
The Residential Tenancies (Amendment) Act 2015 provides for, among other things, the establishment of a tenancy deposit protection scheme to be operated by the Residential Tenancies Board (RTB).
There have been significant changes in the rental market since the 2015 scheme was first envisaged and designed. For example, the draft scheme was originally intended to be financed by the interest payable on deposits lodged; this is no longer viable, given current financial market conditions. Furthermore, it is noteworthy that disputes relating to deposits are no longer the most common dispute type referred to the RTB.
Financing the operation of the scheme is an important consideration, particularly in terms of ensuring that the likely outcomes of a new scheme are achieved efficiently and effectively and that the best value from public funds is secured. In 2015, an analysis of the potential Deposit Protection Scheme costings was undertaken and the estimated costings were as follows:
Set-up Year: €1.5m; annual operation: €3.5m - €4m.
However, there have been significant changes to interest rates, the financial market and rents since then and careful consideration would be required to introduce any necessary reforms and enhancements to the 2015 scheme, with a view to considering whether and how to introduce a re-designed scheme that is fit for purpose and suitable for current and future rental and financial markets. Following completion of the review of the existing provisions and other matters, it is anticipated that legislative changes will be required and these will need to be developed and progressed through the Oireachtas.
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