Chartered Surveyors say introduction of levy on concrete products will challenge viability and affordability of new homes

Chartered Surveyors say introduction of levy on concrete products will challenge viability and affordability of new homes

SCSI estimates concrete levy will add €3K to €4K to overall delivery cost of an average three-bed-semi

SCSI disappointed with absence of meaningful measures to tackle exodus of private landlords from the private rental market

“Vacant property tax will have limited impact on getting vacant properties back into use”

Tuesday 27^th September 2022: While the Society of Chartered Surveyors Ireland welcomed some elements of Budget ’23 – such as the two-year extension of ‘Help to Buy’ – it said the introduction of a new levy on concrete products at a time of significant construction inflation will challenge the viability and affordability of new homes.

In its pre-budget submission, the SCSI said that housing output would have to increase by 8% every year until 2030 if Housing for All targets were to be hit. Mr James said this was a huge challenge for the sector and the introduction of the concrete levy would not help.

The SCSI estimates that the concrete levy will add approximately €3,000 to €4,000 to the overall delivery costs of an average 3 bed-semi, the most common house type in Ireland.

“For many years we have been urging the Government to tackle the soft and hard costs of new home construction. In this budget no measures aimed at tackling soft costs were announced while the introduction of the levy will drive up hard costs. The Minister said that planning permission has been granted for 44,000 new homes this year but the introduction of this levy in April next year has raised question marks over the future viability of those homes and their affordability for first time buyers.”

Property

The SCSI said the extension of ‘Help to Buy’ along with the extension of the Residential Development Stamp Duty Refund Scheme to the end of 2025 and the introduction of a €500 tax credit for renters were the most positive elements of Budget ’23. However, the President of the SCSI, Kevin James, said the failure to introduce meaningful reforms for the rental sector would be seen as a missed opportunity.

He said doubling the amount landlords could claim tax relief on for pre-letting expenses from €5,000 to €10,000 would not halt the exodus of private landlords from the market.

“Our research shows low returns are one of the main reasons landlords are leaving the market. In our pre-budget submission, we called for a levelling of the tax field between private landlords and institutional investors and clearly that has not happened as this measure will have very limited impact. There is a supply crisis across the rental sector, particularly as we have seen in recent weeks in regard to student accommodation. One of the other reasons landlords are leaving is because rental legislation is overly complex. After today we believe, landlords will continue to vote with their feet and rents will remain high due to the lack of supply.”

Vacant House Tax

The SCSI said it believes the introduction of a vacant home tax on its own would not bring many vacant homes back into use. Mr James said that given the extent of the housing crisis it was disappointing to see no targets had been set on returning vacant properties to the market.

“According to the latest census there are 166,752 vacant properties in Ireland. While not all of these properties will be available long term, a high proportion of them will be. Ahead of the budget we said the setting of annual targets should be a priority and we called for funding to be set aside for local authorities. In the budget just €61m is being set aside to tackle vacancy and fund the Croí Cónaithe scheme.”

“If a problem is going to be addressed you need to set targets and measure progress. This is something we have failed to do with regard to vacant homes. We understand ten or more councils do not even have full time vacant homes officers in place. Between exemptions and the fact a home will not be ruled vacant if occupied for 30 days in a 12 month period we believe this measure will have very limited effect. Without vacant home officers, without targets and without the necessary funding, vacant units will remain just that.”

Ends.

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Contact Kieran Garry

GPR Communications

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kierangarry@gprcomms.com