Minister for Finance, Paschal Donohoe is quoted in today’s Irish Times as dismissing proposals for a VAT reduction to be provided for the construction industry.
This comes after reports over recent days that Fianna Fáil is pushing for a VAT reduction. Minister Donohoe reportedly told a forum of employers and unions earlier this week that such a move would not guarantee the production of more homes and it risked “a repeat of the mistakes that caused the crash” in the 2000s.
He went on to say that he would rather the potential foregone revenue was spent directly on building homes. The article claims that the construction industry has already accepted that a VAT cut would not be announced ahead of the budget next month and is instead pushing for the retention of the Help-to-Buy scheme.
According to Goodbody Stockbrokers, "While it is in politicians’ nature to look for quick-fix solutions to the housing crisis, in reality there is no silver bullet. Solving the problems will require a combination of carrots and sticks but also a wholesale change in the land management, planning and regulatory system. That won’t be achieved in one budget."