Ahern’s land value plans could up prices

TAOISEACH Bertie Ahern’s plans to cut the price of new homes

Mr Ahern yesterday promised he would hold a constitutional referendum if necessary to deal with the problem of the high cost of building land.

The Taoiseach has asked the All-Party Committee on the Constitution to give top priority to checking out how land value could be capped and he has asked his officials to produce policy options for curbing the price of building land.

"The Government has the responsibility to ensure that people have access to a reasonably priced house planning, developer and constitutional rights," Mr Ahern told RTÉ.

But the Irish Auctioneers and Valuers Institute (IAVI) president questioned the Taoiseach's plan yesterday, and said Government intervention with the free market in the past only drove up costs to home buyers even more.

Alastair Adair said capping the value of land to a landowner will mean they won't sell, reducing the supply of building land, and result in yet higher prices.

"The history of public intervention in the property market is a vexed issue with a litany of reports and initiatives which have failed to demonstrate a proper understanding of the dynamics that drive property markets," the IAVI president added.

The Northern Ireland-based university lecturer addressed a weekend conference in Galway of more than 200 estate agents and some local authority and political representatives.

Mr Adair said recent Government measures, like the increase in VAT and stamp duty had increased price inflation and driven investment money out of the country.

But the Oireachtas Constitution Committee is checking out ways of stopping builders sitting on land and forcing them to sell at a reasonable price in the public interest. If this is inserted into the Constitution the only way a builder could stop the Government buying their land for a reasonable price would be to challenge it in the courts. Meanwhile, it emerged yesterday the Government was responsible for fuelling the price of homes to first time buyers. Documents revealed the Department of Finance had justified the rise in stamp duty on land in the last budget by saying it could be passed onto first time buyers.

Fine Gael's Environment spokesman Bernard Allen said a recent survey showed the State takes 37% of the cost of a €250,000 house or a shocking €92,600 from that house sale. And to add further to this scandal the Government axed the First Time Buyers Grant, he added.

"The Taoiseach's only response is to have a Committee look into the problem this is little consolation to those struggling to put a house around them," Deputy Allen said.