National Kite-Flying Week

As predictable as the first autumn leaves to fall, Budget Day is once again preceded by a week of political ‘kite-flying’.  While it has become a farcical form of policy-making, there is much to be learned by what gets leaked, and by whom, in the run up to our national budget announcements.

In relation to housing, the SSIA-equivalent savings plan for first-time buyers looks likely to go ahead this year, which will overlap with the final year (unless extended) of the current help-to-buy scheme.  With no details confirmed to date, it is likely that this initiative will resemble the UK ‘Help To Buy ISA’ model, which pays first-time buyers an interest rate of 25% to a maximum of £3,000. If similar values are applied to the Irish scheme, we might see the State adding €3,000 to a €9,000 deposit saved. This, of course, would be double for couples buying together, provided both are first-time buyers. It is possible that eligible buyers will be entitled to one form of relief in 2019 i.e. the savings top up or the repayment of Income Tax and DIRT paid over the previous four years, as set out under the current Irish help-to-buy arrangement. It will be interesting to see how this is handled in Budget 2019.

One of the more helpful indicators in previous years has been to go through the Construction Industry Federation (CIF) pre-Budget submission and then watch for the issues they fight for – and, of course, those issues they concede quietly – to get a good sense of what is likely to be delivered upon.

This year’s CIF pre-Budget submission outlines ways to deliver the National Development Plan 2018-2027 and issues recommendations under three headings: People, Infrastructure and Housing, including:

People

• Support a campaign to attract young people to work in the construction industry.
• Facilitate zero-rate employers PRSI contributions for those engaging apprentices in trades in need of stimulus.
• Introduce an apprenticeship trainee grant for a limited time until the shortage of construction apprenticeships has been addressed.
• Support bids for funding from the Digital Disruption Fund under the NDP towards funding the Digital Transition Roadmap to 2021 through the establishment of a fully supported Centre of Excellence for Construction.

Infrastructure

• Progress and finance the forward planning and preparatory work for infrastructure projects identified in the NDP 2018-2027.
• Utilise appropriate Early Contractor Involvement (ECI) to improve the project management of the planning phase of major projects.
• Address the critical issue of construction and demolition waste treatment and disposal.
• Replace the ‘lowest price’ award criteria with a collaborative model offering improved profits (+1%) in return for desired delivery outcomes in HSEQ and programme certainty.

Housing

• Extend the Help to Buy Incentive Scheme beyond the 31st December 2019.
• Building Control Amendment Regulations (BCAR) and ‘Opt Out’ facility for One-Off Houses: Reinstate the requirement for full BCAR compliance for all single unit housing projects which require a Commencement Notice under BCAR.
• Adjust the taxation of private landlords to reflect the taxation system applicable for corporate landlords at a time when high numbers of private landlords are exiting the residential lettings market.
• House building input costs remain high. Explore all options as to how all-in house construction costs can be reduced so that the market value of completed new homes exceeds the all-in construction costs.

Is there anything you would add to this? As always, let us know your thoughts on what is likely and what is needed in Budget 2019.

Ian Lawlor
086 3625482

Director / Business Development
Lotus Investment Group