In an article published in the World Property Journal, it states that real estate firms in Ireland are very satisfied concerning the business and property section in the recent budget announcement.
An encouraging step forward
Associate Director and Head of Research of Irish real estate firm JLL, Hannah Dwyer, comments on the 2017 budget through the article. She says that the government’s focus on recouping the Irish economy is a plus for the overall market. It gives an aura of encouragement and promotes business growth after the Brexit phenomenon, despite numerous global trials.
A glimpse into the future of Irish real states
She indicates that reducing capital gains tax (CGT) for business people, will in time stimulate Ireland as a business domicile. Which will then propagate an increase in foreign direct investment (FDI) so Irish tax regimes will be on the same level as in the UK.
The hurdle of the budget
The real estate market has seen a focus in this new 2017 budget, encouraging people to dip in this sector especially first -time buyers (FTBs). They will be more prone to buy properties now. However, Hannah Dwyer also stipulates that the hurdle in the way here is the limited budget of 400,000 euros and the curbing of new building projects. It confines FTBs as they are willing to spend on their residential abilities but this limits their activities. The worry now is a price rise due to this.
The tax-free rent scheme
Another positive aspect which appears here is the fact that the government has allowed for a tax-free rent payment. This may help landlords and owners to let rooms or houses for rent. The positivity of this scheme is because there exists, nowadays, a lack of space to rent. She believes that, in the long run, this step will help in supplying accommodation for more people, despite it being quite minor.
Suspension of tax impacting on Irish finance
However, Hannah Dwyer pointed out that there is one negative aspect of this which will, most obviously, directly influence the business of property dealing. Tax incentive suspension will impact considerably on overseas financing which was very much an attractive incentive for Ireland. Moreover, the finance minister, Michael Noonan, increased apprehension about financial supply for real estate with the Irish Collective Asset-management Vehicle (ICAV) and others. The suspension of these funds will leave no other alternative but shock Ireland as it was considered an excellent space to invest, which was once an attribute of the country. It will be hard as many other countries give their investors the chance not to pay any tax, she says.
Welcoming tax reduction in hotel and hospitality division
The associate director also mentioned that the reduction of VAT in the hotel and hospitality division is very much appreciated. She believes that this will be a step in supporting the recuperation of the real estate business. This is a positive aspect, she mentioned, as tourism from the UK is still indeterminate for the moment.
A positive outlook
Lastly, Hannah Dwyer has confidence in the new procedures which will give a positive financial impression to buyers. She finished the interview by saying that she hopes to see upgrades in the retail segment. This last part is directly associated with the consumer outlook and payment.
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