Pleas for VAT exemption ignored

THE Government has ignored pleas by builders to exempt first-time home buyers from a 1% VAT increase.

Thousands of new home buyers who have already signed contracts - but will not be closing the deal before the end of the year - will have to pay the new VAT hike announced in the Budget.

The 1% VAT rise - from 12.5% to 13.5%, announced in the Budget, pushes up the cost of a €200,000 home by 1,800. Up to 8,000 first-time buyers, who have already signed contracts, will have to pay the increased VAT charges because the Government chose not to ring fence deals already entered into but not closed.