AIB HAS THROWN its weight behind a suggestion to cut taxes for property developers in an effort to solve the country’s housing crisis.
The Sunday Business Post reported that Ireland’s largest bank, which is still majority owned by the government, is backing a policy to slash the VAT rate for the construction industry from 13.5% to 9% for a limited period.
Fianna Fáil suggested such a tax break in September. At the time, the party’s housing spokesman, Barry Cowen, suggested VAT should be lowered for three years in a bid to further incentivise developers to build homes and address Ireland’s housing shortage.
However, the policy was pretty much ruled out last year by Minister for Finance Paschal Donohoe, who suggested that such a scheme could cost the exchequer €240 million.
At the time, it was reported that the minister believed there is no guarantee that the move would result in more houses being built and that he would prefer the state to focus on providing social housing.
With that in mind, we’re asking Fora readers this week: Should the government give tax breaks to property developers?