Time For Property Incentives?
In the current housing crisis it may be time for government to consider new and innovative property tax incentives to encourage house building. That’s the view of Bryan Farrell at Walsh O’Brien Harnett, who adds that any such scheme should be focused on individuals seeking an affordable home.
Derek Henry at BDO Irelandbelieves there should be a political debate around what is needed in society, and the measures needed to achieve results. “In certain instances, private development and private capital is going to be the fastest way to achieve the objectives, and this should be encouraged,” says Henry. “We need to look at past schemes that worked well and also schemes that did not work well, and make sure the safeguards are in place to ensure that these mistakes are not repeated.”
Ronan McGivern at RBK concurs: “We know from the past that tax measures aimed at the rental market can be successful. Whilst this may be unpalatable to some, incentives are required to entice private investors into the market, given the lack of supply.”
Grayson Buckley at Crowe notes one of the major challenges facing developers is raising finance for projects. He suggests a scheme whereby taxpayers can provide finance to specific development projects and obtain tax relief on the investment.
Bruce Stanley is conscious of the dilemma for politicians. “If incentives are provided then governments get accused of giving benefits to landowners, property developers etc. If incentives aren’t provided, they’re not doing enough,” Stanley observes. “There is too much political manoeuvring and point scoring going on. Tax policy is one of many ways to influence economic activity, and when there is a housing crisis every option should be looked at.”
Frank Greene at Mazars recommends the cost of all property should be allowed against rent over a 25-year period, as currently none of the capital cost is allowable. At PwC, Mairead Harbron believes there is scope to introduce measures to incentivise individuals and the private sector to invest in green properties by way of targeted tax reliefs.
Joe Cunnane at TRA Professional says Ireland doesn’t have a shortage of space countrywide, just in densely populated areas. “Focusing on creating jobs outside of these areas would seem like a sensible solution,” he suggests.
Tom Mahon at Warren & Partners says the Living City initiative should be extended and simplified. “Property developers are a necessary part of a functioning housing market and if they were appropriately incentivised to renovate or rebuild town and city centres, it would have a dramatic impact on the availability of housing stock,” he says.