If we are to look at housing (at least in Dublin) as being of a crisis nature then perhaps we should consider some bold moves that might bring land into play that otherwise wouldn’t make it.
The talk of a site tax is a good idea, it was the tax we were meant to get from the beginning before the government reneged on their stance for it. This will help create a ‘use it or lose it’ aspect to land holding. The second trick is to encourage movement.
Scrapping the 80% windfall tax would be a start, but most of the site with planning don’t fall into that category, so perhaps scrapping Capital Gains Tax on any site sold (with planning) in 2014 would be a start. The reason for this, and the issue it intends to resolve, is that many sites have insolvent owners, or people too highly leveraged to make the site viable.
Getting rid of the 33% tax (which is harsher than it used to be because the tax was historically 20% but you also get no indexation on development land), might help release property into the market. Who is to say that the buyers won’t just do the same & hoard it?
Easy, if they don’t commence within a year then they have to pay the tax the other person would have paid. Getting rid of CGT will also help to lower the price of land, because any tax, be it stamp or otherwise, is often a type of ‘transaction’ cost which means people search for a higher price to reach a certain net return.
I don’t have the models to do the exchequer effect of this, but suffice to say, with such a large portion of new build being tax, it would probably have little effect on the ultimate bottom line to make sure that sites are either being taxed or being used.
The twin approach of saying to industry ‘we’ll tax you if you don’t use land, but equally, we’ll make it attractive for you to sell to a person who will use it if you can’t’ is the right message, and it will do more to solving the issue than most of the rhetoric.