Sherry FitzGerald broadly welcome the wide-ranging cost of living measures outlined today by the Government in Budget 2023. The expansion of the energy credits for homes and businesses, reduction in the cost of childcare, and the changes to tax brackets should help alleviate inflationary pressures and ensure that our economy remains in its robust position.
In relation to the property market, Sherry FitzGerald welcome the extension of the Help-to-Buy scheme to the end of 2024. Help-to-Buy as a measure has been crucial in underwriting supply and supporting first-time buyers to take their first step onto the property ladder.
That said, the failure to introduce any serious policies to combat the systematic problems in the rental sector is a missed opportunity and very disheartening. The number of properties available to rent has fallen significantly in recent years with private investors abandoning the buy-to-let market. For much of the past decade, for every single investor buying into the market, two are exiting. There is nothing of note in today’s budget that addresses this situation.
The introduction of €500 tax credits for renters, representing as it does less than 3% of average annual rent in Ireland, will have a limited impact on affordability. More importantly, it fails to address the crux of the problem in the rental market, a lack of supply.
Budget 2023 was a missed opportunity to address anomalies in the treatment of all investors in the rental market, including the existing onerous 10% stamp duty charge for the cumulative purchase of 10 or more residential houses in a 12-month period and the many impediments for private individual landlords.
Additionally, the Government have committed to implementing a vacant property tax. This tax, which will be charged at three times the current rate of LPT due on a property, is laudable in its intent, however, it is unlikely to return a substantial amount of stock back to the market.
Finally, the 10% levy on concrete blocks and other concrete products aimed at raising €80 million to assist in financing the redress scheme, is counterintuitive in the current environment.
In conclusion, Ireland is in the midst of a severe housing crisis and there is little in Budget 2023 to alleviate this immense challenge for the Irish Economy.
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For any further information, please contact:
Sherry FitzGerald Group
Ph: 01 237 6500 / 086 252 3277
Sherry FitzGerald Residential & Advisory
Ph: 086 814 8251