Budget 2019: Property And Construction

10 Oct 2018 | 12.22 pm

Budget 2019: Property And Construction

Interest relief for mortgages on private rental accommodation is fully restored

10 Oct 2018 | 12.22 pm

Budget 2019’s main property and construction measures announced focus on delivering the government’s housing programme for 2019, write Jim Clery (pictured) and Carmel Logan, Partners in KPMG  

Housing Strategy

Minister Paschal Donohoe announced the allocation of €2.3 billion to the government’s housing programme for 2019, with an allocation of €1.25bn for the delivery of 10,000 new social homes.

The new homes will be delivered through a combination of construction, acquisition and leasing. These are welcome measures, which in combination with the private sector will continue to make progress towards easing the acknowledged housing crisis.

The involvement of the newly established Land Development Agency in the delivery of these projects provides an interesting and exciting opportunity to increase housing supply, with clear targets on 3,000 houses and expectations of a further 7,000.

Private Rental Sector

The minister announced full restoration of interest relief for mortgages on private rental accommodation. The relief had been restricted a number of years ago, and was not due to be restored until 2021.

Despite some rumours in the weeks leading up to Budget 2019, it is welcomed that the minister has not altered the stamp duty rate applicable to Private Rental Sector (PRS) projects. Given the current housing challenges, any such change could have led to delays in project acquisitions, reduction in investment and ultimately increases in the cost of delivering large scale rental developments.

Local Property Tax

The new valuation date for Local Property Tax (LPT) is 1 November 2019. A public consultation was undertaken by the Department of Finance in April 2018 and the minister stated the report will be published in due course.

The consultation will have particular regard to valuation issues. The minister reassured homeowners that any future changes in LPT will be moderate and affordable.

 

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