Hopes for Budget package to get the housing market on the move
Construction industry wants VAT rate cut to 9 per cent for two years to get houses built
Budget Day looms and speculation is growing that there will be a range of measures announced for the property sector. There’s cautious optimism that Capital Gains Tax relief for investors introduced last year for two years will be extended. It’s generally acknowledged the scheme has generated good activity among cash buyers.
Meanwhile, a stimulus package for construction may be in the offing. The industry is currently slugging it out to get its Vat rate of 13.5 per cent reduced to 9 per cent for a two-year period in order to get houses built. But success may come at the cost of the hospitality industry which is fighting equally hard to retain the reduction in tourism Vat it secured last year. The argument goes there is little cost associated with a reduction in construction industry Vat in a dormant market.
Apparently, senior Government officials recognise the need for renewed building activity – just two additional units were built in the first six months of 2013 compared with the same period last year. They are even suggesting that more than 30,000 new builds will be required annually to meet the lag, which is an even more bullish figure than the 20,000-25,000 figure touted by the Construction Industry Federation.
An announcement of an industry stimulus via smaller scale capital spending projects may see dates brought forward for one off public sector projects such as schools, waterworks, etc.
Expect another dreary retrofit/energy efficiency measure for domestic home improvement projects. Haven’t we seen these before? This time around it looks like there’ll be grants or tax rebates for those who employ tax compliant professionals, in a bid to take such activity off the booming black market.