Developers and auctioneers are calling for a cut in the VAT rate so more new houses are built to alleviate the housing crisis.
With house prices rising and the number of homes for sale dwindling, the Institute of Professional Auctioneers and Valuers (IPAV) says at the minimum, the VAT rate should be cut so it's cheaper to build houses.
“While far from popular in terms of public support nonetheless it needs to be done urgently in the forthcoming budget,” Pat Davitt, IPAV’s Chief Executive said.
“The Government should initiate an immediate investigation into the full costs of construction. And at the very least VAT should be reduced from 23pc to 9pc. In the UK and Northern Ireland there is no VAT on housing and in Hungary where the Government recently cut the VAT rate from 27pc to 4pc there was an immediate surge in building.
“Building costs in Ireland increased by 12pc between 2005 and 2008 and they remain at that level despite the fact that house prices are still 33pc lower than at that time,” he said.