Somebody has to put a stop to social housing provision in its current form. It isn’t working and the continuance of Part V contributions is a mistake.
Part V works as a blunt tool which hits new home buyers in order to provide for social housing, it creates a 20% tax of sorts that has to be absorbed elsewhere in the end costs.
Think about the sums like this, imagine you had to give away 20% of €100, and that for a project to stack up you needed about a 20% return on costs to cover financing charges, cashflow and to help get the next project underway.
The return on €80 to get the €20 on top of the €100 in cost is 50% (80+50% = 120), this cost is absorbed by the end buyer, on top of VAT and development levies etc. This example is not completely fair I’ll admit because the rules state that it’s 20% of the land at existing use value rather than at development land value, some of the …