The Government will not make a dent in the housing crisis by handing out grants in the budget to first-time buyers, “as supply is the problem and not demand”, according to the Irish Society of Chartered Surveyors (SCSI) .
President Claire Solon also warned a reduced 30% income tax rate would not be as attractive to prospective returning emigrants due to a well-priced rental market and lack of affordable first homes.
She warned if the Government wants to increase house buying, it must concentrate on “facilitating affordable supply that can be built quickly”.
Ms Solon said there was “no problem” with the numbers of people who wanted to buy, but there are problems with “pricing levels” and “lack of supply in particular areas”.
“There need to be a Government push to reduce development fees and to improve access to finance for builders.
“We have also argued in our pre-budget submission that there should be a Vat incentive for builders to keep their house prices at an affordable level in particular areas. You may be able to sell houses in some parts of Dublin as people can afford the prices but, outside Dublin and in provincial towns in particular, it is very hard to find any builders starting housing schemes. A reduced Vat rate could be given in places where margins are tighter,” she said.
Vat on house construction is 13.5%, but the SCSI is calling for a 9% rate in designated areas outside the main cities. It is also seeking more grants for the renovation of period properties as so many are lying idle in city centres.
“These are risky properties to buy and there should be more incentive to take them on if the Government wants to bring people back into the city centre,” she said.
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