Investors in restrictive environment due to Government housing policy, Deloitte warns
housing
policy is deterring rather than enticing investors, consultancy firm
Deloitte
has warned.
In a pre-budget submission
, the Big Four firm said recent policy shifts in relation to
rental
regulations, financing, rent caps and stamp duty had 'introduced a level of uncertainty that risks undermining investor confidence' while creating 'a policy environment that increasingly feels restrictive rather than supportive'.
'The flow of private capital is highly sensitive to policy signals and mixed messages can quickly result in reduced investment, delayed projects or cancelled developments altogether,' it said.
The current fall-off in new home completions (they fell to 30,000 last year) has come on the back of a slowdown in apartment building, a trend that is linked to higher borrowing costs.
READ MORE
But the industry here has also blames tighter regulations, including the Government's system of rent controls, which is currently under review.
In its submission, Deloitte said the State's ongoing housing supply crisis was weakening Ireland's competitive edge 'and limiting its ability to attract key skills to the country in crucial sectors such as technology and financial services'.
It urged the Government to introduce both incentives and reliefs for developers to boost supply.
These included capital allowances, stamp duty refunds for apartment construction and corporate tax refunds for the remediation of certain brownfield sites.
Deloitte also recommended several measures for landlords including a reduced
tax
rate on rental income.
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'No single measure will bring about a simple solution and instead the urgent introduction of a number of measures should be prioritised in order to help stimulate housing development,' said Daryl Hanberry, head of tax and legal at Deloitte.
Outside of the housing, Deloitte warned that the State was now facing significant challenges with 'bold strategies' required to maintain competitiveness, attract investment and stimulate significant domestic growth.
It said domestic direct investment could be accelerated by reducing the headline capital gains tax (CGT) rate and tapered CGT relief to encourage entrepreneurs to scale their businesses.
The State's headline CGT rate of 33 per cent should be reduced to 20 per cent 'to enhance Ireland's enterprise environment, support small businesses and facilitate intergenerational succession'.
The consultancy also recommended a tax credit for businesses investing in
artificial intelligence
and digitalisation, applying to expenditure associated with 'the reliably safe development, implementation and use of AI and digitalisation'.
It also urged the Government to introduce a decarbonisation tax credit to reward companies that invest in emissions-reducing technologies and practices.
'Ireland is in a strong financial position and we have choices, but we need to act urgently. It is time for a step change and Budget 2026 is one of those rare moments where the Government can make a significant statement that will create an impact well into the future,' Mr Hanberry said.
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