James Reilly calls for tax incentives to encourage over 55s to downsize
Senator proposes removal of property tax if people move into elderly housing co-op
Former minister for health James Reilly is calling for tax incentives to encourage people over the age of 55 to vacate large houses to help ease the housing crisis.
Dr Reilly, now a Senator, said there are people who would like to downsize but are reluctant to do so as they do not want to leave their area or community.
“There are a lot of people living in three, four and five bedroom houses who would like to downsize. The family have gone but they don’t want to leave their own area. They want to be able to stay in the community that they’re familiar with, where their friends are.”
The former deputy leader of Fine Gael said among the proposals he is suggesting to address the issue is no property tax and no inheritance tax if a home is gifted to a family member.
He also told Newstalk Breakfast that he favours an elderly co-operative model where people could move into a smaller home within the same community.
“A number of things need to happen - one of course is to incentivise older people, if that is their desire, to downside, through some capital incentives like having no property tax if they move into one of these elderly housing co-ops or reduced inheritance tax or gift tax if they give the money towards a child who wants to buy a new house and who may be in serious mortgage arrears and this could be a method for them to hold on to their homes.”
Dr Reilly said the elderly housing co-ops could be achieved by putting in place a model “ a bit like the approved housing bodies we have at the moment. But we need to make it affordable so we need to put a Central Building Fund available to them at one or two per cent finance from somewhere like the EIB (European Investment Bank) who are interested in these sort of projects around Europe. ”
He said the Central Building Fund “makes it affordable for people to build and borrow and the great thing about this is that once it’s built and the people move in and they’ve purchased or they’ve got into a long lease then the money becomes available again to go again, it goes back into the fund and another scheme can start elsewhere.”
He said the proposal “is not designed in any way to put pressure on people” and said he knew people who were property rich and cash poor and lived in big homes but could afford to heat only one room. Sites should be reserved in all towns for elderly people so they could stay in their community “near amenities and not out in a far flung location”, he said.
Dr Reilly also said he is considering running in the forthcoming European Elections saying, “I believe there’s a lot one can do in Europe.”
He said he is still exploring his options, but that he remains “very committed” to Fingal.