Thursday 8 December 2016

How a property tax rebate could help solve housing crisis

Published 20/08/2015 | 02:30

'Tens of thousands of students are scrambling to find accommodation' (picture posed)
'Tens of thousands of students are scrambling to find accommodation' (picture posed)

With the now-annual decrease in available housing units precipitated by students seeking accommodation for the upcoming academic year, it is time for radical measures to immediately increase the supply of accommodation.

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The quickest and cheapest way of preventing this crisis from deteriorating further is to offer a partial or full rebate of Local Property Tax to family homes which take in a student from outside the county. For example, a full rebate could be given on homes valued at less than €500,000 and a sliding scale used thereafter.

Many will dismiss the idea on the grounds that the existing tax exemption from rent-a-room income would dwarf any rebate. Although technically correct, this argument ignores the concept of the 'endowment effect' - people value money that they have to give up (in taxes) more than similar amounts they could gain in the future.

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