Calls for construction taxes to be reduced to increase housing supply

Some of Munster’s top business leaders have called for taxes on the construction industry to be reduced in order to boost housing supply in the region.

Calls for construction taxes to be reduced to increase housing supply

Some of Munster’s top business leaders have called for taxes on the construction industry to be reduced in order to boost housing supply in the region.

In the wake of a general election where housing emerged as one of the key issues, business owners have said the lack of homes and rental accommodation has a significant impact on the ability to attract and retain staff.

Brian O’Callaghan, managing director of O’Callaghan Properties, said the cost of construction is a barrier to solving the crisis.

He said one of the fundamental issues is the amount of Vat developers have to pay to construct properties.

“If [we are] selling a three-bed house for €320,000, about a third of the cost of us producing that house is taxed, or controlled by the state, between Vat and planning contributions,” he said.

“The State, by far, is the biggest stakeholder in the product we are producing. It controls a third of the cost. That’s the fundamental problem with our product; it’s too expensive.”

Sheila O’Flynn, managing director of Sherry FitzGerald in Cork, said the housing crisis is impacting every sector.

“We are in a situation now where developers aren’t going to be able to build us apartments in the city, they’re not viable, and we have a situation where the people who want to buy [property] can’t get the money,” she said.

“When you are going back to the stage where you’re saying a nurse and a guard can’t buy, that’s serious.”

Mike Ryan, who operates the Cornstore and Coqbull restaurants in Limerick and Cork, said securing housing and accommodation for staff has become a major issue in bar and restaurant sector.

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