New land hoarding tax presented as game-changer as hopes rise for housing

With the State firmly in the grip of Covid-19 during last year’s budget, expectations for housing completions were not high, but it didn’t stop the Government from making outlandish housing projections.

Social housing and homelessness schemes spent far less time out of action than the rest of the construction sector, but still, upping the output from Rebuilding Ireland’s 2021 social housing target of 8,907 houses to 9,500 seemed almost eccentric.

Unsurprisingly, it looks highly unlikely this target will be met. In the first six months of this year 2,433 social homes were built, which includes regeneration schemes – where existing social homes are being replaced – and Part V schemes, regarding homes that developers are obliged to sell to local authorities.

The number of homes completed generally speeds up in the second half of any year but this is a lot of ground to make up. Doubtless, however, given the pandemic and materials and worker shortages, there will be a degree of self-congratulation if the figures come anywhere near the mark.

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Expectations will be different this year. Housing hopes are high, not just because the pandemic is receding into the rear-view mirror, but because of the new Housing for All plan published just last month, the successor to Rebuilding Ireland.

Broadly the new plan aims to provide an annual average of 9,500 new-build social homes, 4,000 local authority provided affordable-purchase homes and 2,000 cost-rental homes per year, up to 2030.

Specifically for 2022, it has set targets for the construction of 9,000 social homes, less than the average for the plan, 4,100 affordable and cost-rental homes, again less than the 6,000 average, and 11,500 private homes.

Perhaps surprisingly, Budget 2022 is essentially sticking with the figures announced a month ago, although an additional 30 affordable homes, or possibly cost-rental homes, are to emerge out of somewhere with Minister for Housing Darragh O'Brien announcing this figure as 4,130 on Tuesday.

It is at best notional, anyway, as figures indicate a total of 75 cost-rental homes and possibly eight affordable-purchase homes will have been provided by the end of this year. None of these homes are in Dublin city, where the housing needs are most acute.

Reaction

Reaction to the housing budget was damper than usual, with most having got their joy or outrage out of their system over the Housing for All plan.

The extension for another year of the help-to-buy scheme, a tax relief for first time homeowners, has been welcomed by the Irish Home Builders Association. Landlords' representative group the Irish Property Owners' Association, however, said it was "disheartened, disillusioned and disappointed" that the Government had done nothing to stop landlords leaving the market.

Labour housing spokeswoman Senator Rebecca Moynihan said it was a "landlords and landowners" budget. "Renters remain relegated to second-class citizens. Nothing will be done to tackle unaffordable rents. Too many people are struggling to pay high rents, or simply can't find an affordable place to live. There are tax breaks for landlords in the budget but nothing for renters."

Tenants advocacy charity Threshold and the Irish Council for Social Housing both welcomed the "commitment" to increasing social, affordable and cost-rental housing. Threshold, however, raised concerns about the long lead-time for the new zoned land tax (ZLT), "as well as the very low rate of taxation". The new tax on land hoarding – ZLT – will replace the ineffective vacant-site levy.

Mr O’Brien acknowledged the new tax would not be charged until 2024, but said the unsuccessful vacant site levy it replaces would continue to apply in the meantime. The new tax would be collected by the Revenue Commissioners, which gives it, despite its long lead-in time, the best chance of success of all the budget’s housing measures.