State ‘cannot provide every home’: Minister says cultural change needed on housing

Minister for Housing James Browne has all but ruled out extending a VAT cut on apartment buildings to include all new-build homes in this year’s budget.

The Government cut VAT on apartment building in its budget last October to make such properties more affordable by easing building costs.

In a budget submission to Minister for Finance Simon Harris, lobby group Irish Institutional Property (IIP) said the reduced 9 per cent VAT rate should apply to all home building, not just to apartment construction.

The IIP said a wider VAT reduction in the upcoming budget would improve the viability of housing schemes and “reduce the cost passed through sale prices and rents”.

Billion-euro expansion announced for country’s most congested rail line

Unlike Joe Duffy, Kieran Cuddihy doesn’t ramp up the drama on Liveline

Democrats remain split over their longstanding leniency towards Netanyahu

Government may explore ‘other approaches’ to ensure alumina not reaching Russia, says Martin

However, Browne told reporters on Wednesday he does not believe an extension of the cut would be “meritable”, but pledged he will keep “everything under close scrutiny”.

Browne said the Government has done “an awful lot” in the past 18 months to help the viability of apartment and housing construction.

He acknowledged the war in the Middle East is causing issues for house building and inflating input costs.

The Minister also said there needs to be a “cultural change” regarding the State’s role in housing.

Delivering social and affordable homes is important, he said, but the Government must also facilitate the delivery of private homes because the State “cannot provide every home that everybody needs”.

He also said allowing the State’s affordable-housing agency to build more homes for private sale will lead to an increase in social and affordable housing.

He added that income generated from the sale of private homes by the Land Development Agency (LDA) will be quickly “recycled” to provide more housing for social tenants and affordable purchasers.

“I think this is an appropriate measure. I think it will lead to even more social and affordable homes being delivered,” he said.

Browne said people whose incomes are above the thresholds for affordable purchase or cost-rental homes are “effectively locked out” from being able to buy a home delivered by the State. He said this should not be the case.

Sites with mixed tenures work “better for everybody” living there, he said, adding the proposal is to be included in planned legislation to expand the scope of the LDA to assist in the delivery of housing.