IPAV, the Institute of Professional Auctioneers and Valuers, has welcomed the €5.2 billion funding package for the Housing Department and the extension of the Help-to-Buy (HTB ) scheme to the end of next year.
However, the institute said it was “a great pity” the scheme was not extended to include second-hand homes.
Pat Davitt, IPAV Chief Executive said extending the HTB to include second-hand homes could make “a seismic difference at a very difficult juncture.”
“There is a good supply of properties for prices much lower than that of new homes, typically at prices of between €170k and €250k, especially in rural areas. Such an initiative would have had the positive impact of freeing up properties in the cities for rent or for sale,” Mr Davitt said.
He said new homes, even in rural Ireland, priced between €250,000 and €300,000 are already too expensive for young people on an average wage of €40/50,000.
“There are many areas throughout the country where second-hand properties are being sold for less than what it would cost to construct them. And it would cost young people less to service a mortgage, with its huge long-term benefits in terms of personal wealth, than paying rent,” he said.
Mr Davitt welcomed the continuation of stamp duty reliefs in the agriculture sector, that were due to expire this year.
“Extending the Consanguinity Relief, to the end of 2023 is a very positive development,” he said.
“This means farmlands can be passed on or sold to closely related family members who do not qualify for the 100pc exemption available under the young trained farmer scheme and benefit from a Stamp Duty rate of one percent rather than the higher five percent otherwise applying.
“It is crucial to the passing on of farmlands to a younger generation, usually more highly educated and ready to innovate and adapt to the rapidly changing global market with a need for new measures to tackle climate challenges," Mr Davitt commented.
However, he said it is disappointing that no reduction had been made to the 7.5 percent stamp duty rate on small commercial properties and land of up to a value of €500,000 to bring it in line with the residential Stamp Duty rate of one percent.
“We estimate there could be up to 100,000 properties lying idle, including former commercial premises, that could make very attractive homes. While there are good incentives for renovation young people first need to buy the properties. The current Stamp Duty rate adds €7,500 to every €100k expended,” he said.