Dear Editor, – The lack of substantial proof indicating that the perpetual exemption of all development levies signifies a worthy investment for its €240 million price tag is quite striking (“Postponement of development levies expected to be prolonged to prop up house building”, April 15th, News).
Despite the apparent belief of ministers and government officials that this action is producing results, neither the Housing nor Finance Departments have publicised any economic review to demonstrate the actual number of new homes that might be directly attributed to such a plan.
One fundamental parameter of any tax incentive is determining how much activity it funds that would have transpired in its absence. Hence, it is sensible to presume that this may probably rank high among the most uneconomical tax exemptions available. Yet, the government did not consider it prudent to raise the question or seek evidence prior to setting this plan in motion, as they provide this tax relief to developers indiscriminately, regardless of their need.
The exemption comes with no condition other than a flexible deadline, lacks any mandate for cost savings to be relayed to homebuyers, and shows no initiative to veer away from plans that would otherwise be executed.
Remarkably, the waiver extends to independent houses, despite the fact that such units generally have lower land expenses and are less susceptible to profitability complications.
Regrettably, the government seems to have chosen to disregard some harsh lessons learnt from the Celtic Tiger era. The government’s own Taxation and Welfare Commission emphasised in 2022 how preceding Celtic Tiger property-oriented tax incentive plans served only to inflate costs and prices, diverting public resources to private developers for activities that would have taken place anyways.
We seem to be on the brink of repeating those exact outcomes, at a significant expense to the taxpayers.
Nonetheless, it seems as if a data-driven policy approach continues to be unnecessary when the beneficiaries are those within the private development sector. – Yours sincerely,
KILLIAN O’SULLIVAN,
Artane,
Dublin 5.