Thursday 17 October 2019

Tax land hoarders 'aggressively' to cut rents - ESRI

ESRI’s Kieran McQuinn. Photo: Frank McGrath
ESRI’s Kieran McQuinn. Photo: Frank McGrath

David Chance

Bringing down land prices is the key to making homes affordable and should include aggressive taxes on hoarding of development sites and land banks, according to the ESRI's Kieran McQuinn.

The squeeze on renters and would-be home buyers is increasingly seen by experts as a drag on potential economic development, as well as a human and social problem.

House price and rent inflation have slowed, but speaking ahead of the launch of the Economic and Social Research Institute (ESRI) quarterly economic forecast, associate research professor Mr McQuinn said housing remains expensive.

A vacant site levy brought in to tackle land hoarding may have been set too low, he indicated.

"The site tax is one area that needs to be revisited… I think you need to look at whether that is being taxed aggressively enough in certain cases," he said.

"If you can take away the speculative element and returns from land prices that should mean that land prices fall considerably."

If that does not happen the squeeze on renters will continue, he said.

"You are going to see this continued pressure on the rental side, people who cannot afford housing in the short to medium term."

Meanwhile, research from the Central Bank yesterday revealed the scale of the offshore money in Ireland's commercial property market - including so-called cuckoo funds snapping up entire apartment blocks.

The massive financial flows create new risks that they could import boom-bust cycles, sink house prices and weaken the banks.

Irish Independent

Also in Business