The Society of Chartered Surveyors has called for a zero Vat rate for building “affordable” homes as it warned pent-up demand could mean the housing crisis will last almost 10 years, writes Eamon Quinn.
The society published research last year, called the Real Cost of New House Delivery, which it said showed that over half of the €330,000 costs in constructing a three-bed home was accounted for by Vat, levies, infrastructure, finance costs, and a profit margin.
In a pre-budget submission, the surveyors said Vat cuts on building affordable homes, along with other “radical measures”, would help boost the supply.
On current trends, the market demands of 35,000 new homes a year would not be met until 2026, it said.
The society also seeks changes in the capital gains tax regime to encourage investors to sell land for affordable housing.
In recent months, analysts have increased their estimates for the number of new homes that will be required to meet a burgeoning demand, after Census revisions showed the population was growing faster than first thought.
Official statistics for the number of new homes under construction this year have also been questioned.
“Affordability is already a huge issue for buyers and renters, especially in Dublin and unless tough decisions are taken, the situation will only get worse,” director general Áine Myler said.
Separately, Property Industry Ireland, a part of business group Ibec, said the Government should ignore calls and let the year-old Help-to-Buy savings scheme run through 2019.
Director David Duffy said it was far too soon to end the incentive for first-time buyers.
This story first appeared in the Irish Examiner.