Ireland’s housing demand won’t be met until 2026 - SCSI
The professional body recommends a cut to the VAT rate and a reform of capital gains tax
The current housing crisis is likely to continue for just shy of a decade, the SCSI has warned. Photograph: iStock
Only by 2026 will Ireland meet the demand of 35,000 homes required to satisfy the housing market, a professional construction body has said.
The Society of Chartered Surveyors Ireland (SCSI) has warned that the current housing crisis is likely to continue for just shy of a decade unless the government implements “a range of radical and potentially unpalatable policies.”
One such unpalatable policy it mentions is a reduction in the VAT rate which, SCSI director general Áine Myler says, could cut the cost of building new homes.
“We published the ‘Real Cost of New House Delivery’ last year and that showed the total cost of delivering a three bed semi-detached house amounted to €330,000. Less than half of that - 45 per cent - was attributable to the bricks and mortar or hard costs of building the house.
“The other 55 per cent included soft costs such as VAT, levies, financing, profit, infrastructure and land. Taxes and levies alone can represent up to 18 per cent of the purchase price,” she said.
Additionally, the SCSI suggested that the system of capital gains tax be reformed. The move, they suggest, has had the unintended consequence of creating a barrier to investment.
“Accurate data, targeted VAT cuts to reduce costs and an increase in the supply of developmental land would greatly assist the market supply situation.
“Affordability is already a huge issue for buyers and renters, especially in Dublin and unless tough decisions are taken the situation will only get worse,” Ms Myler warned.