Minister for Finance: Paschal Donohoe could be stepping on an electoral landmine with the VAT cut on apartments and he has left the funds industry seething. Photograph: Sam Boal/Collins Photos
Do you think the reduced apartment tax will lead to more affordable apartments or is this just an incentive to build them
Mr R.D.
That’s really the big question of a budget that pretty much focused all its efforts on VAT and spending in infrastructure.
The stated purpose of the 4.5 percentage point cut in VAT – from 13.5 per cent to 9 per cent – is to make apartment building affordable. But affordable for whom? Is it for the developers who can use this windfall to make their costs stack up better, or for the consumers who will be better able to buy an apartment?
If you take a €400,000 apartment, the reduction in VAT should mean the buyer is now looking to pay €384,140, assuming the full VAT cut is passed on – a saving of €15,860.
However, the history of housing incentives in Ireland is that they somehow end up in the developer’s pocket – either because they simply do not pass on the benefit or because they rais
Continue Reading on The Irish Times
This preview shows approximately 15% of the article. Read the full story on the publisher's website to support quality journalism.