A decade long housing crisis is looming in Ireland unless the Government implements a range of radical and potentially unpalatable policies to boost the number of new homes being built, it is claimed.
According to the Society of Chartered Surveyors Ireland (SCSI) current new build projections at 17,000 for 2017, added to the cumulative undersupply of the past nine years means it will be 2026 before the country is building the 35,000 new houses per annum are needed to meet demand.
It says that action is needed and points out that taxes add up to €60,000 to the cost of new homes and it calling for VAT to be reduced to zero for new affordable homes in designated areas for a specified time to bring costs down.
A research report published by the SCSI showed the total cost of delivering a three bed semi-detached house amounted to €330,000 and less than half of that, 45%, was attributable to the bricks and mortar or hard costs of building the house.
The other 55% included soft costs such as VAT, levies, financing, profit, infrastructure and land. Taxes and levies alone can represent up to 18% of the purchase price. It says that this means that the cost for younger home buyers of financing the extra amount of a new home due to taxes can equal around €60,000 of their after tax
‘That is why we are calling for a reduction of VAT on new affordable properties in areas of high demand from 13.5% to zero for a limited time. 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,’ said SCSI director general Áine Myler.
