Here's the problem.............
Building houses has become more expensive in recent years. Development levies, VAT and more onerous requirements under the latest building regulations means that it has become too costly to build houses at a profit.
Obviously we all know that sales prices have collapsed by 50% in the last six years too which aint helping. In many parts of the country houses are selling for less than the cost of construction. Obviously that situation cant remain.
So what does the government decide to do. It decides to make the situation worse/better. The government will make it easier for 1st time buyers to get a mortgage on NEW houses. This will increase the demand and drive prices up. Once prices have been driven up, Developers can get back in the game and start producing the houses that are needed at a profit.
The government will be smiling from ear to ear picking up the vat receipts and corporation tax and increased income tax take from construction workers. The local authorities will be picking up the development levy and
1st time buyers will be working from dawn to dusk to pay for it all.
Simple isn't it......
The government doesn't (and won't be on the basis of this dubious policy) "fund itself based on levies and taxes that occur solely due to people taking on debt".It is ridiculous that any government should try and fund itself based on levies and taxes that occur soley due to people taking on debt.
While lowering taxes to stimulate growth would be lovely and welcomed by all and sundry, as it stands the country is still borrowing to fund current expenditure, there is very little scope for reducing taxes as you suggest - unless you wish also to make even more austere cuts into basic expenditure (health and social welfare especially).
Has the smell of playing more politics .
Has the smell of old Fianna Fial tricks.
How does setting up a system that guarantees a price increase helps anyone.
From the Press the big shortage supply is in Dublin.
I see no comments supporting it , do not think we are all wrong.
Why not Levy unused sites in Dublin 5% for 1st year idle then 1% per year ?
That would quickly get activity.
Or what am I missing?
Even Karl Deeter, who posts on here occassionally and who is in the mortgage business, and would benefit from this, has come out strongly against the scheme on ethical ground, for which I admire him. No doubt he has many clients ruing the day they every purchased.
The cost of building houses is also still too high and is simply uneconomical at current prices for many developers.
Then there is the problem that there is a lot of land with planning permission for stuff like apartments and small houses which is not what is needed.
What is needed is more focussed direct incentives to builder/developers. This needs to be at a level where the incentives do not lead to overpriced properties. There are ways of doing this, using a little bit of imagination, but this is not the way!
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