#Budget18: Donohoe addresses housing crisis

#Budget18: Donohoe addresses housing crisis

The Government has billed the country's new budget as a national response to new risks and opportunities.

Finance Minister Paschal Donohoe's first year charged with balancing the Republic's books is on course to leave average working families better off to the tune of 500 or 600 euro a year.

Outlining the near billion euro package of tax and spending, Mr Donohoe said: "We redouble our efforts to rise to the challenges that exist while mapping out our national response to the new risks but also to the new opportunities of tomorrow.

"We should do so, and I do so, with optimism."

Mr Donohoe was quick to point to some of threats to the Republic's economy as he declared that Budget 2018 was about "balancing the books".

The minister highlighted Brexit, the potential impact of US trade tariffs and various geo-political threats as three key issues his Government has to guard against.

"It will help reduce the chances that future crises are home-grown and will mean that our economy and public finances are in a better position to weather crises stemming from external factors beyond our control," Mr Donohoe said.

"The list of potential external risks is lengthy."

The budget will amount to €60.9 billion for 2018.

That equates to €12,700 per person in the country.

#Budget18: Donohoe addresses housing crisis

One of the first major announcements from Mr Donohoe confirmed plans for the so-called "rainy day" fund to protect against future economic downturns.

It will be kicked off with 1.5 billion euro from the Ireland Strategic Investment Fund, which makes commercial investments with state finances, before annual payments of 500 million euro a year are made from 2019.

"This is another important step in strengthening the national finances in a changing and risky world, especially in light of Brexit," the minister said.

Mortgage relief will be tapered down to 75% in 2018, 50% in 2019 and 25% in 2020.

Addressing the homelessness crisis, the minister announced an allocation of 1.83 billion euro for housing in 2018.

#Budget18: Donohoe addresses housing crisis

He said 3,800 new social houses will be built next year by the local authorities and Approved Housing Bodies.

"The real way to tackle homelessness and make housing affordable to everyone is to increase supply," he said.

He added that funding for Homeless Services will be increased by a further 18 million euro to over 116 million euro to ensure that emergency accommodation and other supports are available.

In relation to Stamp Duty, the Minister said "the time is right to focus resources elsewhere".

He announced he is increasing the level of Stamp Duty from 2% to 6% from midnight tonight

"This is still well below the maximum rate of 9% which was charged between 2002 and 2008," he said.

He also outlined plans for a Commercial Land Stamp Duty Refund Scheme on commercial land purchased for the development of housing.

With Ireland gripped by an unprecedented housing and homelessness crisis, Mr Donohoe set out a raft of initiatives including one big-ticket item with a new state-run lending vehicle to get builders on to sites.

The Home Building Finance Ireland scheme will begin with 750 million euro.

There was also a commitment to build 53,000 social homes by 2021 and from midnight commercial property deals will see a tripling of stamp duty to bring in 400 million euro to the Exchequer coffers.

Mr Donohoe also moved on a long-awaited levy on vacant development sites.

The tax will more than double from 3% to 7% if the land is held untouched for a second or subsequent years.

Inner City Helping Homeless has described the delivery of Budget 2018 coinciding with World Homeless Day and World Mental Health Day as "almost a twisted irony".

The organisation described the announcement of 5,900 social homes as in line with Housing Minister's Simon Coveney's previous plan for 5,869 homes.

"10,000 homes should have been the minimum target for 2018 and as we were continuously told that money wasn't an object then why isn't the budget reflecting that?" ICHH's Brian McLoughlin said.

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