New rural homes ‘already too expensive for young people’ – IPAV
The Institute of Professional Auctioneers & Valuers (IPAV) has welcomed the continuation of stamp duty reliefs for the agriculture sector that were due to expire this year.
IPAV chief executive Pat Davitt said: “Extending the Consanguinity Relief, to the end of 2023 is a very positive development.”
The institute is also welcoming the €5.2 billion funding package for the housing department and the extension of the Help-to-Buy (HTB) scheme to the end of next year.
However, the institute said it was “a great pity” the scheme was not extended to include second-hand homes.
Davitt said extending the HTB to include second-hand homes could make “a seismic difference at a very difficult juncture”.
There is a good supply of properties for prices much lower than that of new homes, typically at prices of between €170k and €250k, especially in rural areas.
He said new homes, even in rural Ireland, priced between €250,000 and €300,000 are “already too expensive” for young people on an average wage of €40,000 – €50,000.
“There are many areas throughout the country where second-hand properties are being sold for less than what it would cost to construct them,” said Davitt.
“It would cost young people less to service a mortgage, with its huge long-term benefits in terms of personal wealth, than paying rent.”
Stamp duty reliefs for agri sector
IPAV welcomed the continuation of stamp duty reliefs in the agriculture sector, which will now be continued to 2022 and 2023.
Davitt said: “This means farmlands can be passed on or sold to closely related family members who do not qualify for the 100% exemption available under the young trained farmer scheme and benefit from a stamp duty rate of 1% rather than the higher 5% otherwise applying.
It is crucial to the passing on of farmlands to a younger generation, usually more highly educated and ready to innovate and adapt to the rapidly changing global market with a need for new measures to tackle climate challenges.
However, he said it is disappointing that no reduction had been made to the 7.5% stamp duty rate on small commercial properties and land of up to a value of €500,000 to bring it in line with the residential stamp duty rate of 1%.
“We estimate there could be up to 100,000 properties lying idle, including former commercial premises, that could make very attractive homes. While there are good incentives for renovation young people first need to buy the properties,” said Davitt.
“The current stamp duty rate adds €7,500 to every €100,000 expended,” he concluded.