Tuesday 22 May 2018

Housing crisis: Some €750m for builders' loans part of €1.83bn in housing measures in Budget

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Stock photo
Cormac McQuinn

Cormac McQuinn

FINANCE minister Paschal Donohoe has announced that €750m will be made available to provide loans to developers to build an extra 6,000 homes.

The initiative is among €1.83bn in Budget measures designed to tackle the housing and homelessness crisis.

Mr Donohoe said housing remains a priority for the government and he is aware of the "corrosive impact" of homelessness on Irish society.

He also said he is aware of the many people living in the private rental sector who want to move into their own home.

The €750m available  will come from the Ireland Strategic Investment Fund (ISIF) and will be made available to a new organisation called Home Building Finance Ireland (HBFI).

Mr Donohoe said the agency will increase the availability fo debt funding on market terms to commercially viable residential development projects and land owners who want to build homes.

Stamp duty on non-residential property is to be increased from 2pc to 6pc at midnight tonight.

This is expected to yield €376m in 2018.

He said that 3,800 new social homes will be build by local authorities and Approved Housing Bodies and he increased the target for social housing provision in the government's Rebuilding Ireland plan to 50,000 by 2021.

A total of 33,5000 will be delivered through construction.

The Housing Assistance Payment Scheme is to be increased by €149m next year which Mr Donhoe said will enable an additional 17,000 households to be accommodated in 2018. 

Funding for homeless services will be increased by €18m bringing it to more than €116m.

Mr Donohoe said the government is increasing its ambitions for what will be built directly.

In other property measures Mr Donohoe signalled changes to the vacant site levy which will come into force in 2019.

The rate will be 3poc as planned for sites that aren't developed in 2018 but that will more than double to 7pc if the land remains unsued in 2019.

Mr Donohoe said: "The message to vacant site owners is clear - to have your levy lifted, you need to get on with developing your lands urgently".

Mortgage Interest Relief is to be tapered out for the remaning recipients by 2020 under the Programme for Government.

Mr Donohoe said: "in line with that commitment, I am confirming today that this tapered extension will take the form of the continuation of 75pc of the existing relief inot 2018, 50pc in 2019 and 25pc in 2020."

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