Finance Minister Paschal Donohoe has shot down an attempt by Housing Minister Darragh O’Brien to introduce tax breaks to free up the housing supply, the Sunday Independent can reveal.
r Donohoe blocked Mr O’Brien’s efforts to introduce a number of incentives for people to downsize – also known as downsizing – from large three- to four-bedroom homes to apartments in order to free up the offer for young families. Mr. O’Brien also wanted to extend the purchase assistance program to first-time buyers who would put abandoned houses back into service.
However, this was blocked by Mr Donohoe and the Ministry of Finance, fearing that it would dilute the overall impact of the tax break of up to € 30,000 for people buying their first home.
A draft Housing for All plan included a proposal that the finance minister would study the treatment of stamp duties of people buying homes in cases where the buyer resizes an apartment.
The move would aim to encourage older people living in large houses and whose children no longer live there to move to smaller ones. Taoiseach Micheál Martin reported in June that the government was looking at incentives, including possible tax breaks or subsidies for people to downsize under the Housing for All plan.
The draft housing plan said the government would “assess the merits and effects of introducing a reduced stamp duty rate to support buyers moving from a larger house to an apartment.” However, this sentence did not appear in the final plan published last month.
Another pledge was in the draft, “providing an incentive to resize to allow private ownership of apartments for those relinquishing an existing property and to free up existing stock of three to four bedrooms.”
However, marked next to it in capital letters was “NOT AGREED”, and the sentence did not appear in the final shot.
Mr Donohoe reportedly felt that providing suitable housing for people to be pruned was a constraint on the people who bought them rather than the level of stamp duty they would be forced to pay.
Publication of the plan itself, the government’s € 4 billion-a-year framework to tackle the housing crisis, was delayed this summer due to reported disputes between Fine Gael and Fianna Fáíl over its content. final.
Regarding resizing, the published plan states: “The government will develop a national resizing policy to highlight the potential of resizing for households no longer fully occupying their current private housing and will explore options to support and encourage resizing on a voluntary basis. based.”
On the possible extension of the Help to Buy program to those who buy vacant property, Mr Donohoe responded to a parliamentary question from Fianna Fáil TD Niamh Smyth last month. He said the program is specifically designed to encourage an increase in demand for new housing in order to encourage the construction of such properties.
“A decision to include second-hand properties in the scope of relief may not improve its effectiveness; on the contrary, it could serve to dilute the incentive effect of the measure in terms of encouraging additional supply, ”Donohoe said.
Mr O’Brien would focus on how to use the 500 million euros allocated to the Croí Connaithe program.
This system aims to revitalize town centers and towns by financing the rehabilitation of vacant housing, the provision of serviced sites and the activation of existing planning permits.
This would include apartment developments of four or more storeys above certain density thresholds that will be offered for sale to owner-occupiers.
A government source said the fund will be administered by local authorities, but details have yet to be worked out.