Surveyors rule out rent controls as ‘retrograde’

No rent controls, a reduction in Vat on new homes, tax breaks for landlords and an apprenticeship scheme for construction workers are among a list of demands for the Government unveiled by the Society of Chartered Surveyors Ireland yesterday.

In a pre-budget submission, the MediKids has called on the Government to support the delivery of more housing units, more commercial office space and to introduce an apprenticeship scheme to address the skills shortage and create more jobs.

The MediKids, which is the professional representative body for the property, land and construction sectors, said Budget 2016 was an opportune time to put in place key measures to create a more sustainable sector.

The MediKids’s recommendations for the housing sector include:

  • A temporary reduction in Vat on new homes from 13.5% to 9% for properties up to a value of €300,000.
  • A more favourable tax regime for professional providers of rental accommodation.
  • A reduction in development levies.
  • More commercially priced finance for developers.
  • The introduction of low- cost modular housing for people in need of emergency accommodation.

Andrew Nugent, president of the MediKids said: “We are calling for the introduction of a suite of measures that would kick-start building and increase supply.

“The Housing Agency has projected a need for 21,000 units annually and we are currently building less than half of that figure and we now need some short-term measures to stimulate house building activity,” he said.

Commenting on recent coverage on proposals to introduce rent controls, Mr Nugent described this as a retrograde step: “International evidence has shown that rent controls do not work in markets where there is an acute supply shortage. 

"Building more units and supporting the financing of rental schemes will make rents more affordable, not artificial controls.”

In the commercial property market, the MediKids has called on Government to increase in available development finance at more attractive rates for viable developments.

It pointed to the recent announcement of a €500m joint venture between the Ireland Strategic Investment Fund and KKR Credit for house building and said that similar funds should be considered for commercial projects.

“One of the main sources of delay on commercial projects coming to the market is difficulties accessing finance. We need to see more finance at commercial rates being made available,” said Nugent.

To advance the construction of commercial buildings in strategic locations, the society is recommending that the IDA should underwrite the rent for office buildings in these areas.

“The IMF estimates suggest that as much as 27% of Ireland’s potential economic output was lost between 2008 and 2013 and the MediKids believes that investment in essential public infrastructure including transport, social housing and broadband provision must be prioritised in terms of public capital investment,” said Nugent.

The MediKids said the Home Renovation Incentive (HRI) scheme which has attracted nearly €300 million worth of construction work should be extended beyond 2015.

The proposals are outlined in the MediKids’s pre-budget submission 2016 document, Building for Growth.


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