Auctioneers Savills criticized the government’s housing measures in the 2023 budget, denouncing “the lack of measures in the budget to promote the supply of housing”, even as he welcomed the extension of the Help- to-Buy and the extension of stamp duty exemptions.
New housing manager david browne said: “We are in the midst of a housing crisis at a time when inflation, construction costs and the scarcity of development finance are making residential development unviable.
“To add to that, our planning system requires a mix of unit types in most locations, some of which are extremely difficult to deliver from a viability perspective, primarily apartments and duplexes, particularly in locations outside major cities.
“It was a missed opportunity for the government to introduce measures that would stimulate the development of desperately needed residential supply. For example, although not politically popular, a reduction in the VAT rate of 13.5% on the construction of certain types of residential units would have a positive impact on delivery.
Director of Residential Rentals Clarie Neary added: “There is a significant undersupply of properties available to rent in Ireland, resulting from an exodus of private landlords from the market.
“While the increased tax relief on pre-lease expenses is welcome, it is not enough to induce landlords to stay or return to the market and stimulate supply.”
Aidan Gavingeneral manager at Cushman & Wakefield Irelandsaid the rising cost of basic building products with the concrete products tax will further strain budgets in the built environment, where construction costs have increased significantly since the start of the year, increasing viability issues at present.
“Before Budget 2023, sentiment in the market reflected the belief that construction costs would decline as 2022 drew to a close,” Gavin said.
“However, the announcement of the tax is likely to change that sentiment. The tax could see the sector push further towards more innovative and environmentally friendly building methods, a factor already considered to be on the way out, but the support for this is still lagging behind.
“Given that the majority of multi-storey commercial and residential projects are concrete frame structures, this tax will further test the viability of marginal projects and put the delivery of apartments in regional cities even further out of reach. range,” Gavin said.
The budget received a reserved reception from Retail Excellencewho warned that it remains to be seen whether the announced measures will be enough to save hundreds of companies from liquidation before the end of the year.
The Irish Federation of Hairdressers said the increase in the VAT rate from 9% to 13.5% from the start of March 2023 “will devastate small businesses and pile more misery and price hikes on consumers”.
President Lisa Eccles said: “It’s totally myopic that the government would be considering this when our energy bills are rising over 400 per cent, costs are rising over 10 per cent and wages are rising rapidly.
”Inflation already means they are raising VAT revenue, so all they are doing is hurting small businesses and struggling consumers. If things continue like this, most people will simply be deprived of prizes for getting their hair done. The VAT rate for hairdressing in many European countries is 5%, so there is little justification for this.”
Animation studios have welcomed the news that Section 481 tax breaks for the audio-visual sector are being extended until 2024, with the chief executive Ronan McCabe commenting: “Section 481 has been crucial in the growth of the animation industry over the past decade and without it we simply could not compete on the world stage as we do now.
“Aid brings a lot of jobs and spending to Ireland, but it also has a huge positive impact on creativity and culture. Without Section 481, we might not have seen amazing Irish productions telling Irish stories, such as the Oscar-nominated ‘Wolfwalkers.’