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Pre-Budget 2018 Submission

PII puts forward a number of taxation proposals:
  1. Reduce the VAT rate from 13.5% to 9% for all construction type services. Such a reduction would decrease the cost of construction that would lead directly to more sites becoming viable and increased building of new homes. Such a crisis measure should be time limited to two years, after which point it would be reviewed.
  2. Provide a tax credit to homebuilders for the construction of first-time buyer homes to improve the viability of starter homes.
  3. Specific additional targeted VAT reductions for construction of social housing and those who engage in build-to rent activities by means of a tax credit.
  4. Treat rented residential property as similar to commercial property in respect to taxation. Allow VAT recovery on acquisition or development of rental investment residential property. VAT is chargeable on the rent. The investor pays VAT over period of time, with a cut-off when VAT charged on rent equals VAT recovered. This would mean that there is no requirement to finance VAT up-front. This could be an alternative to income tax credit.
  5. Consider introducing targeted "S23" relief to encourage taxpayers to stay and invest in the rental market for a defined period of time.
  6. Exempt rental income from income tax for a number of years to incentivise investment/new supply. Properties rented out as part of the Fair Deal Scheme should be exempt from taxation to promote the provision of these properties to the rental market as quickly as possible.
  7. Consider introducing rollover relief for Capital Gains Tax “CGT” for a residential investor who sells an investment residential property and reinvests the proceeds in residential property. The base cost of the new property to be reduced by the amount of the gain on the property disposed of. This relief would not apply to owner occupied property.
  8. Reduce cost of funding for builders/developers by allowing a double tax credit for interest payments.
  9. Double interest allowance for Part V supply
  10. Recognise build-to-rent as a separate asset generally and for tax purposes
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