05 August 2014 Conor O’Donovan, MBA – Director of Policy & Communications
Surveyors publish 10 step strategy to address urban housing supply shortage.
SCSI says current price rises not sustainable – urges Government to take immediate
“Together these measures would ensure an adequate supply of houses, kick start the
construction sector and create employment”.
Key measures include:
Introduction of a builders finance fund
Reduction of VAT to 5% on new home construction for two years
Establishment of a Revolving Infrastructure Fund
Introduction of a vacant site levy on strategic vacant sites with residential development potential
Reduction in development contributions for two years
Construction of family friendly apartments
LPT exemption for people trading down to smaller units
Tuesday 5th August 2014: The Society of Chartered Surveyors Ireland has published a ten
step housing strategy document which it says will support a quicker delivery of new homes to
meet the supply shortage which exists in Dublin and other urban areas.
The measures include the introduction of a Builders Finance Fund, a reduction on VAT for
new home construction, the establishment of a Revolving Infrastructure Fund and a reduction
in development contributions to local authorities for a period of two years.
The Society, which is the professional body for the property and construction sector, also
believes that the construction of more European style family friendly apartments and the
introduction of a Local Property Tax exemption for people trading down would help to reduce
supply pressures. (See full list of ten steps below)
Recently the SCSI expressed concern at rising house prices and the low level of house
building currently being undertaken. The latest CSO house price figures show that house
prices in Dublin are 24% higher than a year ago and the Society says this is simply not
Only 8,301 new houses were built in Ireland last year while the Housing Agency has pointed
to a need for 80,000 units over the next 5 years, or approximately 16,000 per annum with half
of those required in Dublin.
The Chairman of the Residential Group of the SCSI, Simon Stokes, pointed out that new
houses cannot be supplied on tap and that the lead in time through construction and to
completion generally takes a minimum of two years. He said the upcoming budget provided
an ideal opportunity to implement these measures.
“Our strategy document focuses on practical steps which can accelerate the delivery of new
homes. There is a lack of development finance for builders but the Government could address
this by establishing a Builders Finance Fund. In the UK a BFF fund of €660m has been
established to help smaller builders and to speed up housing developments of between 15
and 250 units which have slowed down or stalled”.
“A reduction in the VAT rate for the hospitality sector worked extremely well here in recent
years, boosting the tourism sector and helping to create 15,000 jobs. We believe a reduction
in the current 13.5% VAT on new homes to 5% for a period of two years could have a similarly
positive impact on house building and job creation”.
“The need to fund infrastructure in advance of a development being completed is a significant
barrier to unlocking supply and we believe the creation of a Revolving Infrastructure Fund
could address this issue. RIF’s are not grants or subsidies but a smart way of providing
financing for developments. Once they’ve been repaid the money can be reinvested to pay for
infrastructure on further projects. Together these measures would ensure an adequate supply
of houses, kick start the construction sector and create employment” Mr Stokes said.
Other measures which the Society believes would be useful are a reduction in development
levies paid to local authorities and the index linking of such levies so that they move in line
with market changes. A reduction in the windfall tax on the sale of land from 80% to 33% to
bring it in line with Capital Gains Tax and the introduction of a vacant site levy on sites of
strategic importance could stimulate development, particularly on sites already owned by the
Local Authorities. The SCSI also recommends that NAMA issue licenses to developers to build
on viable sites in strategic locations while it says a streamlining of the planning process would
speed up decisions.
The Society also recommended a number of measures which it believes would help reduce
the demand for houses. For example a Local Property Tax exemption for people ‘trading down’
to smaller units would increase the availability of second hand homes. This would also happen
if greater action was taken by the financial institutions on reducing the number of mortgages
in arrears, particularly in the ‘Buy to Let’ sector.
Simon Stokes also pointed out that if future apartments were designed for family living this
would reduce pressure on the supply of traditional 3 and 4 bedroom homes.
“The current design of apartments is generally not suitable for long-term family occupation.
We need to move towards the European style which are more suitable for long term habitation,
particularly as we move towards more high density schemes in urban areas” Mr Stokes
Delivering Houses – A ten step strategy to address the housing supply shortage is available
Delivering Houses – A ten step strategy to address the housing supply shortage
Introduce a ʻBuilders Finance Fundʼ to support SME builders completing developments
Reduce development contributions for a period of 2 years
Streamline planning process to speed up decisions and reduce delays
Reduce VAT on new home construction from 13.5% to 5% for 2 years
Reduce windfall tax on land from 80% to 33% to bring it in line with Capital Gains Tax
Introduce Vacant Site Levy on sites of strategic importance in a targeted and transparent manner
Encourage NAMA to license developers to build out sites in strategic areas in its portfolio
Introduce a Local Property Tax exemption for people ʻtrading- downʼ to smaller units to increase the availability of second hand homes
Introduce a Revolving Infrastructure Fund (RIF) to finance infrastructure provision upfront before development
Greater action needed on reducing the number of mortgages in arrears, particularly in the ʻBuy to Letʼ sector.
Conor O’Donovan, MBA – Director of Policy & Communications
Conor O’Donovan, MBA – Director of Policy & Communications
Responsible for the development of SCSI policy positions, Government engagement, research and management and development of all SCSI internal and external communications including PR, marketing/branding, publications and online & social media initiatives.