Tax Relief

Donohoe Torpedoes O’Brien’s tax break for the Downsizer plan

Treasury Secretary Paschal Donohoe shot down an attempt by Housing Secretary Darragh O’Brien to introduce tax breaks to ease the supply of housing, the Sunday Independent revealed.

r Donohoe blocked Mr O’Brien’s efforts to introduce a series of incentives for people – also known as rightsizing – to downsize from larger three to four bedroom houses to apartments to open up to young families. Mr. O’Brien wanted to expand the Help-to-Buy program to include first-time buyers who would put derelict homes back on their feet.

However, this has been blocked by Mr Donohoe and the Treasury Department, fearing it would dilute the overall effect of the tax break of up to € 30,000 for people buying their first home.

One draft of the Housing for All plan included a proposal that the Treasury Secretary would consider the stamp duty treatment of people buying a home when the buyer rents an apartment.

The move is intended to encourage older people who live in large homes and whose children no longer live there to move to smaller ones. Taoiseach Micheál Martin pointed out in June that the government is looking at incentives, including possible tax breaks or grants for people being downsized under the Housing For All plan.

The draft housing plan states that the government would “evaluate the benefits and effects of introducing a reduced stamp tax rate to help those buyers moving from a larger home to an apartment”. However, this phrase did not appear in the final plan published last month.

The draft contains a further obligation to “create an incentive to grant rights in order to enable private ownership of apartments for those who are relinquishing an existing property and to release existing three to four bedroom stocks”.

However, next to it was written in capital letters “NOT AGREED” and the sentence does not appear in the final plan.

It is understood that Mr Donohoe felt that providing suitable housing for the people was a constraint on the people who buy it, rather than the amount of stamp duty they would have to pay.

The publication of the plan itself, the $ 4 billion

Regarding rightsizing, the published plan states: “The government will develop a national rightsizing policy to highlight the potential of rightsizing for households that no longer fully occupy their current homes, and ways to support and encourage rightsizing to volunteer Investigate base base. ”

On the possible extension of the Help-to-Buy program to those buying vacant property, Mr Donohoe responded to a parliamentary question from Fianna Fáil TD Niamh Smyth last month. He said the program is specifically designed to encourage increasing demand for new homes to encourage construction of such properties.

“A move to include used property under the relief scope may not improve effectiveness; on the contrary, it could dilute the incentive effect of the measure in terms of promoting an additional offer, ”said Donohoe.

It is assumed that Mr O’Brien will focus on the use of the EUR 500 million allocated to the Croí Connaithe program.

The aim of this measure is to revitalize inner cities and towns by promoting the renovation of vacant apartments, the provision of managed areas and the activation of existing building permits.

This includes residential construction projects with four or more floors above certain density thresholds that are offered for sale to owner-occupiers.

A government source said the fund is managed by local authorities, but the details have yet to be worked out.

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