REA Statement following 2014 Budget
14th October 2014
The Minister For Finance missed the chance to influence the supply and continuing rising cost of new homes in the Budget, according to Chartered Surveyors group Real Estate Alliance.
Landowners now have a greater incentive to offload potential development land as a result of today’s Budget, but more action was needed to increase the supply of new homes to market.
Real Estate Alliance (REA) is Ireland’s leading property group of Chartered Surveyors with over 50 branches nationwide, comprising many of the country’s longest-established auctioneers and estate agents.
“The dropping of the 80% windfall tax on development land may provide some incentive for landowners to offload potential sites as the tax will now fall into line with the standard CGT rate of 33%,” said REA Chief Executive Philip Farrell.
“We also welcome the Minister for Finance’s intention to commence a consultation process on addressing the area of landowners holding on to suitable development lands in anticipation of a large increase in values over the coming years.
“However, we feel that it is crucial that this process is initiated immediately as the fundamental issue in the marketplace is the lack of supply of homes.
“The significant recent increases in property values are not credit driven and whilst the proposed introduction of new borrowing restriction for purchasers for 2015 may stem the demand somewhat, it still does not address the primary issue of supply of new homes.
“We also feel that the Minister missed an ideal opportunity similar to that introduced in the hospitality sector in recent years to temporarily reduce the VAT payable on new homes which currently stands at 13.5% in an attempt to increase the supply of new housing.
“The proposed new lending restrictions on purchasers will create extra pressure on rental values nationally in 2015.
“REA welcome the extension of the Home Improvement Scheme to provide relief for investor/landlords.
“This can only lead to a higher standard of rental housing stock than is currently being provided in the marketplace.”