Monday 23 January 2017

Last call for LPT

Philip Farrell

Published 30/10/2016 | 02:30

Back in 2009, nine Irish projects made the shortlist for the prestigious World Architectural Festival awards; this year just one appears on it. Never mind, it’s a stunner. Keeper House and Lodge in Tipperary, pictured, by architects Scott Tallon Walker and completed in 2014, is a low-energy design for two separate houses set around a three-sided walled garden. The winner will be announced on November 18.
Back in 2009, nine Irish projects made the shortlist for the prestigious World Architectural Festival awards; this year just one appears on it. Never mind, it’s a stunner. Keeper House and Lodge in Tipperary, pictured, by architects Scott Tallon Walker and completed in 2014, is a low-energy design for two separate houses set around a three-sided walled garden. The winner will be announced on November 18.

The liability date for Local Property Tax (LPT) is just two days away on November 1. The amount that becomes payable this week is for the coming year 2017 with confirmation of how you intend to pay needed by January 11.

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When these local taxes were introduced in 2013, it was hoped, naively by some, that at a future date they might be reduced significantly or even abolished altogether. It is now safe to say that there is a better chance of the Phoenix Park being rezoned for housing to incorporate a night club and bingo hall. LPT filled the Government's coffers to the tune of over €450m last year. (Incidentally the compliance rate is 97pc - does that have anything to do with the Revenue collecting it?)

So have any parts of the country reduced their LPT charge? The four Dublin constituencies of Fingal, Dun Laoghaire-Rathdown, South Dublin and Dublin City have retained the 15pc reduction that was introduced last year. Twenty-three local councils nationally have left the figure as was, while nine authorities in total have increased last year's rates. Some of these had actually reduced the rate last year. Those who will pay the biggest increases are in the Galway and Limerick (10pc) and Wexford (5pc) jurisdictions. The other areas affected are Kildare, Clare, Louth, Monaghan and Cork city and county. In money terms the maximum increase for a typical family home will be approximately €50.

Properties were initially valued by self-assessment back in 2013, with a reassessment proposed this year. However, the finance minister pushed that date on to 2019 in the recent Budget. By the time 2019 rolls around, values will most probably have jumped, so unless the rates change in the meantime, we will all be faced with a big increase. For example, some parts of Dublin have seen 60pc increases in values on the 2013 figure. If LPT increases to match, can we assume at that juncture that the quality of services provided by the local authorities will also be 60pc higher?

According to the authorities, LPT pays for all the services provided by local authorities on a day-to-day basis, including public parks, libraries, planning and development, fire and emergency services, maintenance and cleaning of streets and street lighting. It is a significant amount of money for property owners to fork out so it's vital that the local authorities are held accountable for how it is spent.

Site workers needed

A report just published by DKM Consultants in conjunction with the Construction Industry Federation (CIF) highlights the imminent recruitment shortage for the sector. At the moment, construction employs 136,000 people in Ireland. That's up from just 103,000 in 2014 and up 10,000 on last year. The demand for construction workers is expected to grow by a further 75,000 by the year 2020.

According to CIF president Michael Stone: "There were only 4,400 apprentices across all trades in construction in 2015 compared with 23,700 apprentices in Q4 2007. This year so far there have been around 1,500 new registrations and this report indicates that we need to reach an annual level of registrations of around 4,000 to sustain forecast activity."

One potential solution lies across the Irish Sea. In the light of post-Brexit uncertainty, will UK-based workers be interested? Given that the euro and sterling are expected to reach parity by the end of next year, earnings in Ireland will be worth 30pc more in real terms than pre-Brexit.

A number of recruitment agencies have reported that inquiries from UK-based construction workers are up 35pc following comments from Theresa May on the Brexit timetable. While Brexit will create real challenges economically for us as a nation of exporters, these statistics put into perspective the challenges that exist for the UK government in steadying the ship and giving their electorate confidence in that country's ability to deliver jobs.

Could this decade be remembered as the era when 'English Paddys' came to work on Irish building sites?

BER and building costs

The results of a report just published by the Central Statistics Office on BER certificates and heating make for interesting reading. The compulsory requirement for a BER certificate was introduced for property in Ireland in January 2009. To date, 702,000 BER audits have been carried out on a total housing stock of just over two million dwellings. Every new home must have a certificate. Also every property which is offered up for sale or rent must provide a BER certificate.

The balance of 1.3 million properties have not required one to date, as they are not new and have not been sold or rented since its introduction. Remember, 68pc of residential property in Ireland is owner occupied.

A BER certificate lasts for 10 years so re-certification will commence in 2019. Cost varies depending on house size and location but a typical starter home inspection would cost roughly €150. Building requirements are tightening up all of the time with more efficient methods of water and space heating, ventilation and lighting required. Most new builds in Ireland are now rated B at least. Due to the age profile of the Irish housing stock, most properties constructed before 2005 have a rating of C to G.

The flip side is that since 2010, 95pc of new builds have a rating of either A or B - in fact 57pc of dwellings built since 2010 have an A rating. The average age of a dwelling in Ireland is 31 years - though in Dublin that rises to 36 years because of the number of period houses.

What can we take from these statistics? The cost of construction in Ireland is exorbitant but then the minimum standards required are now much higher than before - some experts would say too high. It is a good thing for the consumer and the quality of their homes. But, at the moment, the costs are fuelling the crisis by preventing houses being built.

In motoring terms, home-buyers are being forced to purchase a GTI when all they want is the basic model.

Sunday Independent

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