Building sector calls for abolition of stamp duty

THE Construction Industry Federation (CIF) has asked the Taoiseach to abolish stamp duty to reignite the country’s ailing building sector.

The CIF has written to Brian Cowen’s department outlining a range of measures which it believes are essential to stimulate the construction industry and the Irish economy.

CIF director-general Tom Parlon said the €10 billion bank recapitalisation plan announced by the Government provided a basis for the resumption of normal lending conditions in the economy.

“To maximise the benefits from this move, the Government now needs to act quickly to reignite consumer spending and help the country recover from what is proving to be a deep and painful recession,” he said.

The measures CIF are seeking include:

* A moratorium on residential stamp duty until the 2009 budget.

* Introduction of a first- time buyer grant until the ’09 budget to partially off-set the cost of VAT on the purchase of new homes.

* Greater promotion and immediate roll-out of the State’s home choice loan scheme for first-time buyers.

* Fast-tracking of planning applications for one- off housing projects, as well as residential and business extensions and renovations.

* Reinstatement of all cancelled NDP infrastructure projects, increased roads and public transport investment and introduction of a new “build and leaseback” PPP model to leverage private investment in schools, social housing and primary healthcare.

* New grant to encourage homeowners to improve the energy efficiency of their existing homes

“Getting the housing market moving again is the surest way of jump-starting consumer confidence and increasing Government revenues,” said Mr Parlon.

“As it stands there is at least €1.3bn in VAT tied up in unsold new homes. Movement on both the new and secondhand markets would create badly needed employment in sectors such as surveying and within law firms and would significantly boost consumer spending on household goods.

“Stamp duty is a major barrier to transactions in the secondhand market and suspending it until the ’09 budget would encourage people to take advantage of the available value.

Mr Parlon also urged the Government to introduce a grant for first-time buyers to partially off-set the 13.5% VAT paid on new homes. Again this measure would “only be available up until the ’09 budget”.