The Irish Government should focus on measures to increase housing supply for all housing sectors, rather than handing out grants to first time buyers for new homes, it is claimed.
Initiatives like reducing VAT on affordable housing, making public land available for home building and providing financial help for builders should be considers, according to the Society of Chartered Surveyors Ireland (SCSI).
Claire Solon, SCSI president, pointed out that the cause of the current house crisis was on the supply side due to the extremely low levels of housing construction.
‘Grants to first time buyers will have very little impact on the housing crisis because supply is the problem, not demand. Reducing or even eliminating VAT on affordable housing and establishing a Development Finance Agency with expertise in construction lending would have a much greater impact and offer a much better return for the taxpayer,’ she explained.
She pointed out that the VAT reduction for the hospitality sector has worked extremely well and the society would like to see at least a similar reduction to 9% for a defined period, focusing on houses under the €300,000 price point.
‘We believe that this action, coupled with access to finance for builders and a Capital Gains Tax holiday for a set period to encourage supply of development land to the market, are three measures which would provide a much needed kick start to house building,’ said Solon.
The organisation also believes that planning around increased regulation needs to be improved and policymakers should listen to developers and builders to find out what would help them to construct more new homes.
‘We heard that there was no land fill available in Dublin for the removal of development site rubble and that the nearest available location was Carlow. Cork is also apparently running out of space. One builder gave the example of a three house project he is working on where the cost of disposing of rubble could vary from between €30,000 to €150,000 depending on which method he used to get rid of it. This disparity of costs on a three house project is just not sustainable,’ said Solon.
‘It also indicates how unprepared our local authorities and state agencies are to deal with the increase in construction activity needed to provide housing. Government officials in a number of departments need to engage with the industry as a matter of urgency on issues like this if costs are to be brought down and to combat delays in construction projects,’ she added.
