Stamp duty and shortage of workers put pressure on building industry

Last year’s rise in stamp duty and a growing shortage of workers are putting pressure on the Republic’s building industry, according to a new report.

The Minister for Finance, Paschal Donohoe, trebled stamp duty on commercial buildings to 6 per cent in October's budget in a move that some warned could hit values.

A report by Joanne Kelly, partner with accountants PwC and Áine Myler, director general of the Society of Chartered Surveyors, says the Dublin market absorbed the tax increase.

“However, we understand that this increased cost to purchasers has made sales more challenging outside Dublin,” the authors say.

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Buyers pay stamp duty, so any increase in the levy is likely to prompt them to reduce what they are likely to offer for a property.

Skills shortage

The report warns that the skills shortage already highlighted by groups such as the Construction Industry Federation is the single obstacle holding back building activity in the Republic.

More than eight of out of 10 building companies are having problems recruiting surveyors and commercial managers, it points out.

At the same time, a majority report a squeeze in the numbers of plasterers, carpenters, electricians, bricklayers and plumbers.

A Connacht-based surveyor told the authors that a lack of labour and rising staff costs were a major issue. “Block laying costs have increased by 25 per cent in the past six months,” he said.

The report states that the skills shortage is reaching the point where it would be significant even if the economy does not grow as fast as predicted.