Fear of backlash at the polls means changes to LPT unlikely
TWO things stand out from this census data. While the numbers renting have dramatically risen, the vast bulk of householders either own their homes outright or with a mortgage or loan. The Government will be ultra-cautious about imposing any additional burden on these 1.15 million households when the Local Property Tax bands are re-drawn next year, for fear of a backlash at the polls in the local and European elections, and the general election to come.
There are a number of reasons, but they centre on the extra financial burden households have been forced to endure over recent years. Older homeowners who have paid off their mortgages have had their pensions raided, as well as paying a raft of additional taxes and charges.
Those who bought at the height of the boom are also servicing large loans, with many enduring steep interest rate hikes.
The Government needs to raise money to fund a social and affordable housing programme, as well as projects in the National Development Plan and dayto-day spending across all government departments. But it will be ultra-cautious about imposing a property tax hike, despite sound reasons for doing so, particularly when the tax, as designed, is not fair for those living in the cities, where property prices are higher.
Political cowardice is likely to mean the status quo will remain.
That’s not to say tenants haven’t paid a hefty financial price over recent years, and the census findings again highlight just how reliant the State is on the private sector to provide rental properties.
The sector seems to serve no one but institutional landlords well. They enjoy better tax treatment and have the financial muscle to buy up entire developments, thereby setting prices for huge numbers of tenants.
That has helped fuel prices which stand at record highs. And there’s no light at the end of the tunnel. Since the Census of April 2016, just under 30,300 new homes have been built. That level of completion won’t lead to prices falling any time soon.
The enormous reliance on the private rental sector highlights the failure of the Government to provide homes for its citizens. Fine Gael has been in power for seven years now. It should have done better and has also spectacularly failed to bring vacant homes back into use, and to use above-the-shop premises.
It can talk about planning permissions rising, but these figures are meaningless. The only thing that matters is the number of new homes delivered, just over 14,000 last year. There is demand for at least 25,000.
It seems to be pinning its hopes on the market to restore supply. It’s far from clear that this is a safe bet. The fact that it now plans to utilise State-owned lands to provide more private dwellings, instead of focusing on social and affordable, speaks volumes.