Brian Cowen (Laois-Offaly, Fianna Fail)

Government policy in the housing market has focused, among other things, on improving supply, assisting home ownership particularly for first-time buyers, facilitating the expansion of the private rented sector and promoting the regeneration of certain areas. In this context, a range of tax incentives exist in regard to the housing market in the case of first-time buyers and other owner-occupiers, for tenants and investors. I can detail these for the Deputy if he desires.

The years 2002 and 2003 were the eighth and ninth successive years of record housing output with 57,695 and 68,819 completions, respectively. This positive trend in supply has continued into 2004, with statistics for the six months to June showing that overall house completions at 35,957 were up 21.4% on the same period last year. The rate of house building is now more than double that in 1996. We have had some success in our tax policy but we do not claim all the credit.

Like all other goods and services, the State finds it necessary to raise taxes from this area. However, there has been some badly informed commentary recently in regard to the tax take from new homes. Figures in excess of 40% have been attributed to the amount the Government raises in tax from each new home. However, this figure is wrong. The cost of a new home that accrues directly to the Exchequer through taxation is more like 28%, based on both Dublin and national prices. This is broadly in line with the tax take on the overall economy.

The housing market is a complex and dynamic one and demands continuous monitoring and adjustment to address changing circumstances. As the Deputy will appreciate, it is not the practice to comment on the possibility or otherwise of tax policy changes in the lead-up to the annual budget.

See this speech in context