Reducing VAT on house purchases by 4.5% will do nothing to makes homes more affordable – Ó Broin
Reacting to reports today that AIB are advocating a return to Celtic Tiger era tax policy by reducing VAT on home purchases from 13.5% to 9%, Sinn Féin Housing spokesperson Eoin Ó Broin TD has said:
“Today, the Sunday Business Post has reported that AIB wants to return to Celtic Tiger era tax policy by reducing VAT on home purchases from 13.5% to 9%. This is bad policy, will not work, and must be opposed.
“AIB has added its voice a small but vocal chorus of groups who clearly have forgotten the disaster this policy was the last time round. The Construction Industry Federation, the Institute of Chartered Surveyors, and Fianna Fáil have all called for a return to the bad old days of ‘Bertienomics’.
“Reducing VAT on house purchases by 3.5% will do nothing to makes homes more affordable. According to the CSO, average new homes in Dublin are now running at above €450,000, with used homes running at €389,000. A 4.5% VAT reduction will shave just €15,000 and €13,000 of these properties respectively, doing nothing to make them more affordable
“There is also no way in which such a tax break could be enforced to ensure the purchaser would benefit. Some of the advocates of such a measure propose that such a reduction should only be applied to homes below a certain price. However, this is illegal under EU VAT law.
“The only result of such a tax break would be more money going into the pockets of developers with no return for the homebuyer or the taxpayer. This kind of reckless tax policy was part of what destroyed the economy back in the years before the crash.
“Given the scale of the financial bailout given to banks and developers since 2008 and the enormous burden placed on the shoulders of ordinary people by a decade of austerity, AIB, and indeed others such as Fianna Fáil, have a brass neck to propose such as policy. I would urge the Government to stand firm on this issue and turn its back of boom and bust tax policies.”