The Construction Industry Federation has urged the irish Government to restore confidence in the housing market by slashing stamp duty.
Launching the CIF’s annual Construction Review, federation president Hank Fogarty called for a radical reform of stamp duty and mortgage interest relief to bring stability to the Irish housing market.

Fogarty said: “The house market has stalled as a result of negative sentiment.  On the supply side activity levels have fallen significantly and the prospects are that as low as 25,000 units will be built during the first six months of the year.  It is imperative, therefore, that confidence be restored sooner rather than later so that a serious shortfall in housing completion numbers does not arise in key growth areas.

“Government action needed to restore the required level of confidence includes a reduction in the penal top rate of stamp duty from 9% to 5% together with an increase in mortgage interest relief for first time buyers over and above what is already committed to by Government.  In addition, investor rates of stamp duty in the new homes market must be reviewed downwards so as to promote investment in the domestic Irish market rather than facilitating export of our investments abroad.”

Fogarty claimed that mobility within the housing market is significantly reduced and this will have a negative impact on overall economic activity and employment and exchequer receipts. ”With renewed confidence, housing starts and completions will rapidly return to the medium term requirement,” he said.

He added: “There can be no diversion from commitments on capital expenditure, and, if required, Government must borrow up to the limits permitted by the Stability and Growth Pact to fund infrastructure development planning.”