Budget 2019: Cut stamp duty on sites for first time buyers
IPAV says increase in stamp duty ‘adversely affecting’ affordability of one-off houses
People should be able to build their own homes cheaper, IPAV says.
First time buyers should be able to buy sites at a reduced rate of stamp duty to allow them to build houses around the country more cheaply, according to the Institute of Professional Auctioneers & Valuers.
According to IPAV, the decision in last October’s budget to increase the rate of stamp duty on commercial property transactions from 2 per cent to 6 per cent was “adversely affecting the cost of a new house for first-time buyers”.
“Affordability is a big challenge for the typical first-time buyer in their 20s and 30s,” said Pat Davitt, IPAV chief executive, arguing that the stamp duty hike “effectively means the State insists that buyers have a huge and unrealistic level of savings when a 6 per cent contribution to the State is added for the privilege of a buying a site on which to build a home”.
The increase in the rate of stamp duty means that a site valued at €40,000 has a stamp duty charge of €2,400, as opposed to €800 a year ago.
“That discourages young people and those with fewer resources from living in rural Ireland in particular. It’s typically impacting the local, nurse, garda or teacher,” Mr Davitt said.
IPAV’s pre-budget submission also called for VAT on building to be reduced from 13.5 per cent to 9 per cent and to be reviewed after two years.
“The total tax take on a new house is estimated to be somewhere in the region of 40-45 per cent of the cost of a property. All such charges are paid in full by the house buyer and impact affordability,” IPAV said.
Concerns with the repeated delays in supplying rural broadband is also raised as a concern. It warns “unless the plan can be successfully executed properties will lose value and in some areas will become unsaleable”.