VAT rate cut could see price of homes drop by €100k

The cost of a family home could drop by €100,000 if the VAT rate for new homes is cut.

The head of the Construction Industry Federation has said the cost of a €300,000 house could be cut to €200,000 if the next Government reduces tax levels.

Fine Gael is reportedly considering a tax reduction as part of a deal to form a coalition with Independents and smaller parties.

A document released to those taking part in the talks suggests that the VAT on new homes and apartments could be lowered from 13.5% to 9%.

Tom Parlon, Director General of the Irish Construction Industry Federation has said the exchequer benefits hugely from every house built.

“It’s the tax take out of housing that’s the problem and it’s not being accepted,” said Parlon.

“I’ve met Government ministers and senior civil servants for the last four or five years and because the toxicity of construction they didn’t want to hear it, but 36% of the value of the first house goes directly to the exchequer.

Meanwhile, national suicide prevention and bereavement charity Console has expressed concern that the strain on people losing their homes could drive them into a suicidal crisis.

Paul Kelly, CEO of Console, has said his charity has seen an “upward trend” on the amount of callers their 24-hour helpline has received in the last six months because of the housing crisis.

“Our free 24-hour helpline receives around 3,400 calls a month, but over the last six months we have noticed an every increasing upward trend in the amount of people calling due to the housing crisis,” said Kelly.

“Our professional staff are trained to identify high risk cases where there is suicide ideation, and we are seeing ever-increasing amounts of people in pre or post-repossession crisis at high risk of taking their own lives. Callers in this area tend to be those who have lost their homes, those in high mortgage arrears, those facing foreclosure and those struggling to deal with high rents that they cannot afford.”

“There is no doubt that the housing crisis is having a detrimental impact on people on people’s self worth and on their mental health and wellbeing. You simply cannot imagine the mental health relief that would spread throughout the country if it were announced that people would not be forced to leave their homes.”

 

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