A removal of local authority levies on new home construction and a help-to-buy-scheme for first time buyers are just two of the measures included in the CIF pre Budget submission.
A delegation from the CIF presented its submission during a meeting with Minister for Finance, Michael Noonan TD and Minister for Public Expenditure and Reform, Brendan Howlin TD in the Department of Finance recently in the run up to Budget 2016.
The meeting allowed the CIF to discuss some of the major issues facing the industry ahead of the Budget, while also providing a direct opportunity for the CIF to highlight specific measures that the Government can take to increase activity in the construction sector.
In comments made after the meeting, the Minister for Finance Michael Noonan, TD, said it was “obvious” there was a lack of three-bed semis around Dublin. He also said a review of mortgage caps for first time buyers. “Builders would say that the application of the prudential regulations from the bank might be too restrictive,” he said.
Speaking to The Irish Times the Minister went on to say: “What I’m saying is that market conditions are changing rapidly and there are aspects of it now which, according to the construction industry, are inhibiting starter homes.
“All I’m saying is the bank should review. If the bank say we’re not changing anything then of course I’ll accept that.”
In advance of the meeting CIF Director General Tom Parlon said: “Although the industry is beginning to see strong growth in terms of output and of employment, with the latest CSO figures showing almost 126,000 people employed in our sector, we are still a long way off where the industry needs to be.
“The Government must ensure that they deliver a programme of growth for our industry, as set out under the Construction 2020 policy document. This will enable builders to build, renters to rent, and purchasers to purchase. A very simple, yet effective example of how to do this would be to introduce a ‘help to buy’ scheme for first time buyers, similar to the UK model.
“We are also eagerly awaiting the announcement by Government of its five-year spending plan on capital projects, which has been discussed by the Economic Management Council on 16th September. This is of huge importance to our industry because in previous times, public spending represented about 50% of the activity in our sector. Thankfully the 2014 budget saw a reversal of the trend in cutbacks on public spending on capital projects, and we hope budget set aside for construction and social housing related projects will be ring-fenced in the upcoming announcement”.
Key priorities set out by the CIF in advance of the meeting with the two Ministers are outlined in a detailed CIF pre-budget submission, including:
- Introduce a ‘Help to Buy Scheme’ to assist first time home buyers.
- Introduce a tax incentivised savings scheme for future purchasers of new homes.
- Reduce development costs for housing, including development levies.
- Introduce a temporary VAT rate of 9% for residential construction for a two year period.
- Restoration of 100% tax deduction on the interest expense incurred on loans to investors in residential property.
- Reduction of Capital Gains tax to 20%.
- Facilitate renewal of construction related jobs and support for apprenticeship training.
Tom Parlon concluded by saying: “The proposals from the CIF which will be discussed with Minister Noonan and Minister Howlin are measures that the Government can easily implement in the upcoming budget. The construction industry has returned to growth and jobs are being created, but now is the time for assistance from the Government to ensure that the gains are not lost.”
Our image shows the CIF delegation heading to a pre Budget meeting at the Department of Finance, 17th September 2015: (L-R) Hubert Fitzpatrick, Director of Housing & Planning, Anne Cleary, Director of Communications, Tom Parlon, Diretcor General, Philip Crampton, Chairman of PT&C Committee, Dominic Doheny, Senior Vice President, Niall Bourke, MEBSCA President, John O’Shaugnessy, MBCA President and Hugh O’Neill, Chairman, Irish Home Builders Association