The Irish budget has promised €1.2bn for housing and a new three year help to buy scheme for first-time buyers.
Measures announced by finance minister Michael Noonan today include:
- A 5 percent PAYE rebate of up to €20,000 over four years on new homes worth up to €400k. Properties up to €600k will qualify as well but the maximum rebate will be €20k.
- 47,000 new social housing units by 2021
- an extra €28m for emergency accommodation for homeless people
- an increase in tax deductability for residential landlords by 5% to 80% to support rental market
- increase in income ceiling for Rent A Room scheme by €2,000 to €14,000 a yer.
- extension to the Home Renovation Incentive Scheme to the end of 2018
- keeping VAT for hotel and hospitality sector at 9%
- reducing rates of universal social change (payable on gross income) for many taxpayers by 0.5%
Housing minister Simon Coveney said the budget was “transformational” for housing.
But Marie Hunt, executive director and head of research at CBRE Ireland, said that the announcement that tax-efficient fund structures like ICAVs and QIAIFs were being reviewed could have a negative effect on property.
Hunt said: “Many transactions and investment decisions have been put on hold until such time as there is clarity on this issue so it is frustrating that investors now have to wait until the publication of the finance bill later this month to get clarity.”
She said tax changes to the fund vehicles could damage international investor confidence and occupier appetite and even diminish the value of real estate assets bought through those structures.
