An association representing Ireland’s property sector has urged the Government to pause the proposed land value sharing legislation until meaningful consultation with the industry takes place “as a matter of urgency”.
It is among several recommendations made by Property Industry Ireland (PII) in its report titled Making an Impact in Housing – Immediate Policy Priorities for the First Days in Government.
The land value sharing (LVS) measure which is designed to reduce land speculation would see a levy of 25 per cent tax on the value of land that is rezoned for housing.
However, PII said it is “deeply concerned” about the proposed measure, saying it is already having an adverse impact on transactional activity in the development land market, “particularly by hindering housebuilders’ ability to acquire early-stage development sites.”
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It argued its introduction will make land with planning more expensive, “which will ultimately be reflected in the purchase price required for a house when delivered,” the report published on Tuesday reads.
Other recommendations include changes to schemes aimed at first-time buyers to encourage developers to build more new homes within their reach.
Recommending an increase to the €500,000 property value threshold currently in place, PII argued the current threshold for the Help To Buy Scheme “may not align with current construction costs or market realities.”
Similarly, it called for an increase to the “restrictive” price caps for eligible properties under the First Home Scheme, which range from €325,000 to €500,000 depending on the location.
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These changes, alongside a recommended VAT rebate programme for purchasers of new homes, would increase accessibility for first-time buyers while also incentivising developers to bring projects to market faster, PII said.
Separately, the Ibec association said to achieve the more than 50,000 annual housing completions proposed, at least half will need to be new apartments, warning that housing targets will not be met without the return of “significant private sector apartment purchaser demand”.
Some 8,763 apartments were completed in 2024, down 24.1 per cent from 2023.
“A primary reason for the reduction in apartment completions is a fall-off in private sector investment activity for private rental units,” the report reads.
It recommended a recalibration of existing rent control measures whereby the rental cap is linked to the tenancy and not the property.
“This will encourage international institutional capital to once again consider Ireland as a location for residential property investment, while in tandem, protect affordability within existing tenancies,” the report reads.
This is alongside a recommendation to introduce a special and temporary rate of income tax, equivalent to the standard rate of 20 per cent, on rental income derived by individual investors from the purchase of new apartments, for seven years from the date of purchase.
The report states this has the potential to deliver an additional 60,000 apartments by 2028.
Separately, about 30,000 high-density permissions are before the four Dublin local authorities, said PII, which also called for an accelerated and “functioning” planning permission process, saying local authorities “need to be made accountable for making timely and grounded decisions”.
This is alongside the establishment of a taskforce to prioritise and co-ordinate the delivery of essential infrastructure such as water connections for housing developments already in the pipeline, enabling projects to proceed “without unnecessary delays”.
Noting that the 30,330 new housing units completed in 2024 fell short of Government targets and “remain well below demand”, PII director David Howard said the housing crisis is driving emigration and hindering economic growth.
“PII urges immediate policy action to support construction while implementing long-term strategies to incentivise private investment and boost supply,” he said.
