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PII Pre-Budget 2019 Submission

Summary of Recommendations
Policy Certainty for property investment
Property Industry Ireland calls on Government to maintain policy certainty for the property market in Budget 2019

New homes
• Government should retain the Help-to-Buy initiative to December 2021
• The Help-to-Buy initiative grant should be increased to 7.5%, up to a maximum of €20,000, of the purchase price for urban centre locations outside Dublin until housing supply in those regions reach the targets in Project Ireland 2040. This will help Government in meeting its aim of 50% of new home development taking place in the existing built-up footprint of these cities1
• Reduce to 9% the VAT charged on the construction of new homes to be sold for less than €500,000 for a time-limited period
• Urgently resolve issues around uncertainty relating to the rebate of stamp duty paid for land for housing development

Rental
• Immediately restore full interest relief against rental income
• Local Property Tax to be allowed as a taxable rental expense
• Retain the Home Renovation Incentive for a further five-year period for rental properties, and increase the cap on expenditure to €50,000 for refurbing existing vacant properties that will be new to the rental market particularly to support areas outside of the Greater Dublin Area
• Introduce the option to charge VAT on rent in residential leases, similar to previous waiver of exemption with ability to cease charging VAT on the rent when the VAT charged matches the VAT deducted on acquisition/development. This will ensure that any new development for rental remains for this purpose and makes the build-to-rent model more attractive
• In terms of plant fixtures and furnishings in dwellings, allow the cost to be written off over 5 years rather than the current period of 8 years
• Reform self-administered pension scheme (SAPS) rules to facilitate investment in the provision of rental through removing the arm’s length rule for a one-year period to allow a window for existing rental properties to be added to the SAPS. This will ensure that there is an incentive for landlords to retain properties in the rental market

Better us of the Existing Housing Stock
• Introduce a two-year Capital Gains Tax rate of 20% to encourage the sale of long-term (at least 24 months) vacant properties in urban centres. This will be of particular interest to units outside of Dublin.

Mobility in the housing market
• Allow relocation expenses to be tax deductible for households moving to a smaller home (including in the rental market)
• Introduce a stamp duty exemption for households purchasing a smaller home
• Introduce a time-limited exemption from property tax for those moving to a smaller home (including in the rental market)

Skills
• Introduce a temporary living away from home allowance for EU nationals moving to Ireland and working in a construction industry sector where there is a skills shortage
• Introduce a returning home moving expenses allowance for Irish nationals returning to Ireland and working in a construction industry sector where there is a skills shortage. Both these credits should be in the form of a credit to employees that is passed on in payroll
• Introduce a short-term measure of funding of vocational or third-level courses in a property-related disciplines to facilitate lower fees/ greater grants for students undertaking these courses to address the critical shortfall in skills
• Introduce tax measures to encourage take up of apprenticeships

Land Management and Supply
• Introduce a VAT refund for the cost of infrastructure associated with providing services on residentially zoned land which is to be developed for investment/rental purposes by way of allowing the exercise of the option to charge VAT on the rent in residential lease
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