Ireland: Construction sector pitches plan to boost housing stock
25 August 2014
Posted by: Author: Mark Hilliard
Author: Mark Hilliard (The Irish Times)
Measures listed would ’double building rate’ to 20,000 units a year in next two years
The Construction Industry Federation has released a seven-point strategy designed to double the country’s housing stock within two years.
It says the Government should implement the plan, which includes tax rebates for would-be buyers and a temporary 9 per cent VAT rate for residential construction, in order to reap the rewards of 20,000 units built by 2016.
The measures also include calls for a special development finance fund, a "help-to-buy” scheme, tax incentivised savings scheme and the restoration of full interest relief for investment in residential property for the rental market.
Currently, it said, about 10,000 new homes are anticipated this year, whereas the Government and the Economic and Social Research Institute (ESRI) have said 25,000 are required every year to meet demand.
"Everyone knows there is a supply issue when it comes to housing in this country. We’ve had so little building taking place over recent years that there simply aren’t enough houses to meet the demand,” said CIF director general Tom Parlon.
The seven point plan, he said, would "end the rapid house price rises we are currently facing in Dublin - rises which are likely to continue until we start building sufficient housing for the property market”.
The proposals are included in the CIF’s pre-budget submission to Government.
The full seven steps as outlined in the policy document are:
1. To create incentives for new home purchasers such as a property tax rebate, a partial rebate of the development levies paid to developers and additional tax allowances for first time buyers.
2. Replace Part V development contribution for social and affordable housing with a 1 per cent levy across the sales of all housing - new and old.
3. Introduce a temporary 9 per cent VAT rate for residential construction.
4. Create a special development finance fund.
5. Establish a ‘Help-to-Buy’ scheme.
6. Create a tax incentivised special savings scheme.
7. Restore full interest relief for investment in residential property for letting purposes.
This article first appeared on irishtimes.com.