Calls for property tax exemption

The buyers of newly built homes should be exempt from paying property tax for 10 years, the Construction Industry Federation (CIF) argues in its pre-budget submission to Government.

The CIF says the tax holiday can be justified arising from the Vat and development contributions paid up-front for building the new home.

The builders’ body also said such a move would act as a stimulus for the new housing market.

And the Professional Insurance Brokers Association (PIBA) called for mortgage interest relief for both first- time and non-first-time buyers to be extended for a further two years, and not be abolished in 2013 as planned, so as not to hinder recovery in the market.

The PIBA is also calling for an end to an anomaly whereby those who are building homes and drawing down mortgages, currently cannot benefit from tax relief on the portion of the mortgage that would be drawn down after Dec 31.

The CIF said the banks should have mandatory lending targets for new mortgage lending imposed on them.

The federation also wants:

* A reduction in the Vat rate of 13.5% to 9% for construction services on a temporary basis;

* The fast-tracking of the programme for installation of water meters so that all meters can be installed early in 2013 to enable metered water charging to be introduced next year;

* Local authority development charges to be revised downwards to reflect the reduction in construction activity and the lower market values of new developments.

CIF director general Tom Parlon said: “The budget offers an annual opportunity for the Government to announce a wide range of measures that will help the economy.

“Among their considerations we are urging them to include measures that will help get the construction sector working again.

“We have put forward a range of policy suggestions which if implemented could have a major impact on the construction sector — a sector which continues to be a major employer in this country, despite the declining level of activity.

“Most of these are practical initiatives which would help stimulate construction in this country and would not involve a major cost to the exchequer.”