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FINANCE MINISTER PASCHAL Donohoe has today strongly come out against the reintroduction of celtic tiger-style tax breaks for property developers.
The comments from the Fine Gael minister signal that the two government parties are at odds in their approach to tackling the housing crisis.
Last week, Taoiseach Micheál Martin told reporters that the Government is exploring possible tax breaks for private housing developers in a bid to boost supply.
Speaking today in Brussels, Donohoe appeared to push back against such proposals.
“What I’m not going to do is reintroduce or propose the very tax reliefs that did such harm to our economy and the building of homes for many years in Ireland,” he said.
He noted that broad tax reliefs for developers, such as what is known as Section 23 relief, have proven to be “very, very costly”.
“And we’ve already acknowledged that it’s very difficult to identify how they can be targeted. I don’t believe those policies are the ways in which we will make progress in the delivery of more homes,” Donohoe said.
The Section 23 tax relief gave property investors generous tax breaks for renovating or buying properties for the rental market before the 2008 crash.
These properties were largely in inner city areas.
Investor and property groups have been lobbying the government to reintroduce such relief in recent times, arguing that it would help increase housing supply and the supply of rental properties specifically.
Last week, when asked about what tax breaks are being explored, Taoiseach Micheál Martin made the point that he wants to see supply stimulated on brownfield sites in cities. These are sites that were previously developed but are no longer in use.
Later today, a Cabinet sub committee on housing will meet to discuss proposed solutions to the housing crisis.
Last week, Tánaiste Simon Harris revealed that a revised Housing for All plan would be published by Government.
The announcement signals a possible shift in Government policy after it fell short of its housing delivery targets for last year.
The target was to build 40,000 homes in 2024, but only 30,300 were built.
A recent report from Davy Stockbrokers found that 90,000 homes need to be built in Ireland every year to 2031 to meet demand.
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Developers getting tax cuts won’t mean cheaper homes.
It means two things.
1) developer pocketing the money, but no decrease in property prices. But increased profits for them.
2) Politicians getting brown envelopes. Possibly a wasted tribunal in 5-6 years.
Developers don’t want to build houses they want to make money. If they can make as much money by not building and getting tax breaks that’s what they will do.
@Patrick Kavanagh: So, you can apply your negative ideology to every human activity. Working people no matter how serious and sincere they are about looking after their duties are “GREEDY MONEY GRABBERS” stop reading lefty psychological material and rejoin the goodness world.
@thomas molloy: business is about making money,if you can make the same profit from half the amount of units then you will build half the amount of units
@thomas molloy:
Yep and that’s what happens.
The Celtic tiger developers walked away owning billions. The state was left on the hook for this. When I say the state I mean the person on minimum wage paying USC.
Some of these developers are. Johnny ronan and Richard Barrett are back developing despite leaving the tax payer on the hook for 1.7 billion.
In my view the state should hire the builders directly to build on government land. Fix a price before going to contract.
Take the profit out of social housing and some affordable housing.
Not all property developers are money grabbers some are honest decent people.
But the system is not set up in a manner the more expensive the home the larger the profit they make. They make appropriately 20% per home so on a 500k home thats 100k.
@Patrick Kavanagh: in my experience in the industry that’s about right in terms of profit. But the govt won’t build directly on state labd (our land), no money in that for all the heads in the trough.
As an aside, they just announced a 5m euro contract to refurbish officers barracks in Cork for 20 officers, that’s 250,000 per officer, the land is already provided, you could build a 2 bed house for each of them comfortably within that budget. A synic would say Brown envelopes modern style in the taoisechs back yard.
@Eddie Garvey: it wouldn’t be the first time something smelled fishy…
https://www.irishexaminer.com/news/arid-20144327.html
@thomas molloy: It’s 164 to 10. I think you have lost the election.
@Patrick MC Dermott: that’s sad. You’re counting the thumbs up here as a yardstick to who is winning an argument? Make up your own mind, don’t rely on this echo chamber of a place to take over your brain. Please DO NOT give me a thumbs up people. I don’t want them.
@thomas molloy: Property development is not some sincere altruistic pursuit conducted for the benefit of humanity.
If you applied the same logic as currently exist in Irelands housing crisis to another human activity the delivery to market and sale of bread, you would have the existing population of Ireland, shops with bare shelves and the owners of those shops only opening occasionally throughout the year, to offer an annual total of 35,000 loaves of bread at €350,000 each, on a first come first served basis, with no limit on the number of loaves any one customer could buy.
And our goverment ministers issuing statements about they were now considering offering shop owners tax incentives to encourage them to deliver 50,000 loaves per annum until 2030, rising to 60,000 from then on..
@Dvsespaña: that’s an accurate picture of USSR
@Dvsespaña: very true, but you can make your own bread, it’s not a carefully controlled market so the produce has to be competitive or else consumers will go elsewhere, housing on the other hand is carefully controlled by govt and developers, so greed can flourish.
@sean weir: No. If that was the case there would be a scramble to build houses.
@sean weir: If the GREED THEORY was valid then they would build twice as many not half. This is needed to create sufficient stock.
@thomas molloy: It’s not, but you don’t contribute fully formed arguments to any discussion, just glib soundbites or throwaway one-liners.
Fixed pure ideological regimes, such as capitalism, communism, socialism and even dictatorships, all suffer from the same flaw, the people that either find themselves in or gravitate towards holding the reins of power, sooner or later believe themselves to be a breed apart that is more deserving of reward and they hold everyone else in contempt.
The responses to and treatment of issues such as housing, health care, employment practices and income, education, and childhood poverty all illustrate the underlying contempt for their population regardless of the prevailing alleged ideology.
@thomas molloy: You obviously don’t understand the current situation, property developers and builders are building less housing and by controlling the supply to market, they are not only maintaining current high prices, but they are inflating prices even further.
Meaning that they can build increasingly less housing and make the same or even more money for doing so. The only thing that would alter this situation as it stands without government intervention, is if the demand for housing dropped, but given the perfect storm of an ongoing housing crisis, and increasing population in need of housing and hedgefund speculation in the domestic and commercial property rental markets in Ireland, this situation will only get worse.
@thomas molloy:
This would destroy demand.
Demand 101 is keep supply low that creates a artificial high demand.
People sleeping in cars for weekends for the chance of getting a house.
“Those who do not learn from the past, are doomed to repeat it”
@Brian Hunt: nothing new about that.
The human race seems to a destructive steak. As was, As is, As ever shall be, world without end, amen.
@offside again: good grief !
*have a destructive streak*.
@offside again: the human as a destructive steak…..reminds me of that old Twilight Zone episode with a young Richard Kiel in it.
You can almost smell the stench of the recession at this stage….with FFG its a matter if when not if and how hard its gonna hit this time
Buckle up folks cos doesnt matter who ya voted for or agenda, we are all in it deep
@Patrick Newell: that’s a conspiracy theory
@Joe Willis: explain what you mean.
@Ross: his claims are a complete conspiracy theory
@Patrick Newell: 100 %
@Patrick Newell: This time, they can’t say we all “partied.”
@Patrick Newell: hoop talk
@Patrick Newell: global recession brought on by USA ?
@Joe Willis: how can you say that?
This govt hasn’t a clue how to run the economy,if the yank stop the corporate tax gift forcing massive tariffs and we lose major companies,the bunch we have in charge won’t know what to do , honestly Harris and Martin have never had to work in the private sector,they have no idea how to solve any problems that come along ,look at housing and health care fecked for years ,and Martin was the man the formed the HSE in it’s current form .
@Luke Littler: wtf are you talking about
@sean weir: Oh,and you think if Sf or the Sd’s were in charge they would steer us out of a global recession without anyone making any compromises….please.Im not a fan of this government but they would be better placed if we do hit a recession than the other lot……The other lot have never ran a country so I’d prefer a crowd that have.
@Joe Willis: that’s not an explanation.
@sean weir: according to a book I read, the Irish have plenty of talent ; unfortunately ; running a country isn’t one of them.
@Joe Willis: No, our economy is boom to bust, basic fact. Yet the bist never hits the rich because the ordinary people are faced to bail them out. Let the banks and the rich fall this time.
@offside again: Ireland is too small to be a republic, and too big to be a lunatic asylum. We walk a fine line.
My youngest wasn’t too impressed with Waterford but loved Cork, Kerry, sligo and Mayo. He visited Donegal and Northern Ireland and loads of other places. He loved Ireland. Thankfully he knows nothing about the journal.ie and the comments.
But he did say that he that he wouldn’t want to live there. Like me he prefers France but he’d also like to spend some time in Canada. He’s in the forestry trade, but I’m trying to dissuade him. Plenty of forests left in Europe, especially France, Poland etc and Scandinavia.
@Luke Littler: I can only assume if the government is working hard to keep its promises to you, you must be a refugee or a pretend one. This government isn’t helping Irish people in any way
@Patrick Newell: Some of ye just want us to be in a recession.Just to say ye are right.
@Patrick Newell: another soothsayer.
@John Paul: Good one ha ha, I’m not a fan of this government yada yada and then slates the opposition.
@Patrick Newell: What goes up must come down. That’s a fundamental law of capitalism. The trick is to be able to make enough to tide you over and get out before things go bad.
@Seanie: yes,exactly like I said,can you not understand?….i don’t like this government but I like the opposition less.very easy concept to understand really.
@PhiBo: We’ll it’s all down with socialism….so I’d rather capitalism…..until something new comes around.
@John Paul: like I said…ha ha, yeah, good one.
@Patrick Newell:
last recession was world wide, but the 99% of anti government posters on this site tend to paint a picture to suit their own narrative.
Fine Gael handed our blocks of apartments to the vulture funds for a song ,gave them rental income tax exemptions so the can now rent 2 bed shoe boxes for 3k a month tax free as Enda Kenny used to say “a great little country to do business in” it sure is
Good cop, bad cop….all for the pantomime show.
Martin, he never lost it he is itching for the Galway tent again
Martin was in the very government that facilitated this to their building mates during the boom. When the economy imploded he had the brass neck to publically state that there had been no bank bailout. It just shows that this effing clown has learnt nothing. Private bank debt was put on me, my children and their children because of this pig and his FF party. It would be nice for once if Donohoe stuck to his guns and didn’t buckle under pressure from a twit with no economic knowledge.
Joke as always
Just bring in more immigrants. It’s that simple. More immigrants equals a better economy we were told. So what are you waiting for FFG? Last year we brought 149,000. This year let’s make it 500,000.
@Joe Willis: The Healy Rae’s welcome this
@Joe Willis: Let’s put the IPAS army to work!
@Chop Chop: in Ukraine as peace keepers
@You Cant Be Serious: Or better yet, in their own countries.
Just more dithering and stalling by Government the same as their so called crack down on the number of Airbnb short term rentals, all talk about a property registration and planning permission.
The solution is just a simple two questions
Do you charge a daily rate on your property for maximum profit if so then you pay
60% tax on rental income
Do you offer a long term lease on your property for a minimum of one year or more then you pay 25 % tax on your rental income – The Spanish and other European government’s are taking action short term rental properties and so should the Irish government
Lol! “A recent report from Davy Stockbrokers”.. open you wallets livestock
I would trust Paschal. He knows all the bills waiting to be paid.Just the deportations alone wiĺ cost a fortune. The mental health time bomb coming down the track will.need to be paid for
If Mr
O Donoghue turns out to be our Musk and cuts waste in Co.Councils OPW and other Quangos I”ĺl be a happy bunny.My favourite annoyance is Womens National Council. Who are they. What strata of women do they purport to represent. Have they been elected. The other is the Arts Council
Ran away with themselves under Catherine Martin.
The obvious solution is for the Government to build the houses.
Here we go again government looking after the developers again pity they don’t look after the ordinary workers
If you want something done? you have to do it yourself.
Quam Babatunde.
@sakk sa: RIP
BRING BACK THE BOOM!!
Nothing wrong with developers making money, as long as lending is under control? Better the developers get it than the landlords?
@brian o’leary: And sure if they lose their shirt, we’ll just bail them out, right? Can you imagine gambling it all in Cheltenham in March and coming home and asking for a hand? Only in Ireland
@brian o’leary:
Thats the problem the just want to make money not build houses.
Hence they are throttling pipeline to decrease supply and increase profits.
Less work more money.
@brian o’leary: I think you’ll find a lot of developers are also landlords.I remember during the boomtimes a local developer used to keep a few houses in each estate and put them into their sons&daughters names, so they could not be touched when things went pop.Now they want to offer a lot of the same developers tax breaks, we’ve already bailed them out once.
@Patrick Kavanagh: that would require them working together, which would be impossible as they tend to be very self centered.
@Ckeego: ‘as long as lending is under control ‘
@brian o’leary:
My local town all the petrol stations charge the same.
It is in there best interests to do so.
If you build 10 houses at 400k that’s 20% profit.They make 80k per home 800k total.
If they build 8 homes at 500k at 20% profit that’s 800k profit.
What would you rather.
Same money, less work, it’s human nature. What’s more if you keep demand high you keep profits high.
@brian o’leary: For sure! But has it ever??
He’ll be put in his place. Meehole will see to that. Roll on Tiger 2
Let 1st time buyers claim back the vat on a new house and put a minimum time limit on it that they have to own it.
Build the bloody houses and stop cribbing. Either build or shut up the construction industry is not the St Vincent de Paul whose employees deserve a decent wage
Good, we are looking as though our economy is overheating, don’t add more fuel to the fire
have your say