VAT on new homes should be reduced for first-time buyers - Ring

The Fine Gael spokesperson on community, rural and Gaeltacht affairs Deputy Michael Ring has called for a reduction in VAT charges in order to stimulate new house sales. But Dep Ring is empathic the benefit should only apply to first-time buyers and not developers.

Dep Ring explained: “At the present time, there are approximately 70,000 unsold new homes on the market. There is a VAT levy of 13.5 per cent on these when new homes are sold. On average if the house is valued at €300,000, then the Government would collect €2.8 billion on those 70,000 houses when they are sold.”

Continuing Dep Ring added: “I want to make the point that if the houses are not sold the Government cannot collect VAT. Perhaps for first-time buyers, the Government should reduce the VAT by 25 per cent. Then instead of the Government collecting €40,500 (on a house valued at €300,000 ), they would collect €30,000. There would have to be safeguards in place to ensure this money benefited the first-time buyers and not the builders.

“This might stimulate the building industry again. Houses could be finished and a cash flow would be created in to the banks. It would help first-time buyers and the building trade,” concluded Dep Ring.

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