By Ted Healy of DNG TED HEALY

Budget 2023 was introduced last week against the backdrop of significant economic headwinds, both domestically and internationally including the war in Ukraine, rising inflation, a Cost of Living crisis, and rising interest rates.

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It is in this context that Budget 2023 contains the largest package of spending measures by any Government, designed to ease the financial pressures faced by households at the present
time.

Here we look at some of the property related measures contained in Budget 2023:

The Help To Buy (HTB) Scheme was extended for a further two years until December 31, 2024 in its current format.

RENT TAX CREDIT

This is a new €500 tax credit for private tenants who are not in receipt of other State housing supports. It will apply for 2023 and for subsequent years (until 2025) but may also be claimed (in early 2023) in respect of rent paid in 2022. Married couples and civil partners can claim a double tax credit of €1,000.

PRE-LETTING EXPENSES

There was an increase in the eligible expenditure limit for pre-letting expenses for landlords to €10,000, and the vacancy period for qualifying was reduced from 12 months to six months.

VACANT HOMES TAX

A Vacant Homes Tax (VHT) will be introduced in 2023 and will apply to residential properties which are occupied for less than 30 days in a 12-month period. The measure aims to increase the supply of homes for rent or purchase to meet demand. The tax will apply to properties which are unoccupied for 12 months or more and will be paid by property owners. The tax will be charged at a rate equal to three times the property’s existing base Local Property Tax liability.

EXTENSION OF RESIDENTIAL DEVELOPMENT STAMP DUTY REFUND SCHEME

The date at which projects wishing to avail of this scheme must commence construction is being extended from December 31, 2022 to December 31 2025. In place since 2017, this is a refund scheme whereby a portion of the stamp duty paid on the acquisition of non-residential land is refunded where that land is subsequently developed for residential purposes (subject to certain conditions).

DEFECTIVE CONCRETE PRODUCTS LEVY

A new Defective Concrete Products Levy will be introduced in 2023. The measure aims to go some way to offset the cost to the State of the Defective Concrete Blocks (Mica) Redress Scheme. The levy will be set at a rate of 10% of the cost of the concrete product, ex VAT, and will come into force from April 3, 2023. This measure will add to construction cost inflation at a time when building costs are already high, and ultimately it may lead to a decline in new housing output. Furthermore, the new levy may simply be passed to the buyer in the form of a higher price for the new home.