Auctioneers readily admit that the findings of the Bacon Report adopted by the Government - specifically that property investors and speculators should not be entitled to tax relief on rental income - has dried up this once lucrative market.

However, one Dublin auctioneer and letting agent, Mr Tim McDonald of McDonald & Company, has found that these new tax regulations have had a penalising effect on owner occupiers who inadvertently become landlords - often because of an employment transfer - and want to rent out their Irish property while they are away.

"If an individual or couple emigrate from Ireland and intend letting out their house while they are away, under the provisions of the Bacon Report, if they do so after April 1998, they will not be allowed to write off their mortgage interest against their rental income," says Mr McDonald. This is the case even if the house has been their principal private residence and was never let out before.

"A great deal has been written about the effect the changes have had on investors," he says, "but I haven't seen anyone take up this issue. I've had a few clients lately, however, who are moving abroad and have asked me to let their house for them. When I mention to them that they will not be able to claim tax relief on any rent, they are quite shocked. When they bought their house, the mortgage interest tax relief had been factored in. Now such couples are facing a tax loss."

It must be said that mortgage interest tax relief is not the huge benefit it once was when the write-off was at the highest rate of tax. Today, a young professional couple might typically have a £70,000£100,000 mortgage which would result in more than the £5,000 mortgage interest relief available for married couples.

If they first claimed the relief less than five years ago they can claim the full £5,000 at the standard rate of tax - 24 per cent. Under the terms of the Bacon Report if they rent their property at the equivalent rent to their mortgage payment (typically £500 a month on a £70,000 loan) they will lose £1,200 in mortgage relief. In other words, they will have to find another £100 a month to meet their mortgage payment. (If they had claimed tax relief more than five years ago, they would be liable for tax relief only on 80 per cent of the £5,000 figure minus £200. This amounts to £3,800. Calculated at 24 per cent, this would leave them with a tax loss of £912.)

This isn't a problem for someone with a very low variable rate mortgage, since they are only receiving a token amount of mortgage interest relief in the dying stages of any mortgage (at this stage you are mostly paying off principle, not interest) or for someone with a house which is very desirable and who is expecting to make a profit from the rent and can offset the loss of the tax relief against it. The homeowner who is most disadvantaged by the new regulations is the person with a relatively new, high value mortgage. But they do have a few options.

They can sell the house and buy a new property wherever they move to. If they rent a property in their new location, they could always invest the proceeds of the sale. However, they can also appeal to their employer to help them make up the difference, perhaps by way of a rent supplement in their new location. (This will be subject to either income tax or benefit-in-kind however.)

"I would like to think that a letter from the prospective employer, detailing the length and purpose of the appointment, would be sufficient for the Minister to make an exception in these kind of cases," says Mr McDonald.