Colm Burke (Cork North-Central, Fine Gael)
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I welcome the introduction of the 9% rate, which is reduced now from 13.5%. When originally proposed, it was 9% on sales and then there was a problem with housing agencies that own their own site and were getting apartments built. It turned out that it would be 13.5%. Since this amendment is being made, where they are getting them built the rate is down to 9%. The problem still arises that a developer who has a site and planning and is building, and who is dealing with a housing agency, the 9% rate will only deal with the building and not with the site cost. The site cost will still be at 13.5%. I am coming from a legal background on this. If I was acting for a housing agency that was buying a site from a developer and having the developer build the property, I would be advising it to make sure the site was transferred to its name to protect the housing agency. If something went radically wrong with the building, they would be protected because the site would be in the name of the housing agency, or likewise if it was a local authority that it would be in its name. Therefore, the site would be transferred at an early stage. My understanding is that the VAT rate will still apply on the site at 13.5% and on the building at 9%. I am wondering if it can be worked out that the 9% would apply across the board for the building and site cost, where there is a clear case that this is for social housing, through either a housing agency or a local authority.