Housing crisis and building inspection
Sir, – In response to the housing crisis, construction and property lobby groups have started calling for the VAT rate on new houses to be lowered. They tell us that such tax reductions would make many new housing developments viable.
But such tax reductions would not lower the cost of new houses. Instead, they would profit the developers.
So the taxpayer, including the first-time buyer, is to pay twice over. First, through contributing to property developers’ increased profits; and second, through the loss of tax revenue funding essential services.
There is a better way for the government to reduce costs and get more houses built.
Economists at the Dublin Economics Workshop have confirmed that the cost of complying with Phil Hogan’s disastrous self-certification building control regulations is an average of €20,000 per unit. This compares with less than €1,000 per unit for the local authority-based building control inspection system in Northern Ireland. This €20,000 is a hidden cost. It does not go to the State. It goes on professional time, defensive design specifications, insurance and more. It is paid by the house-buyer, as is the case for all other costs. But it is in the power of the State to eliminate it.
By introducing an independent system of building inspections, the State could reduce the cost of house building by twice what the developers are asking for.
This, too, would make many new housing developments viable, but would not cost the taxpayer.
It would also be a better system – the evidence is just up the road in Northern Ireland. – Yours, etc,
EOIN Ó COFAIGH,