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27-10-2020, 14:44   #1
 
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Reducing Land Costs to Deliver Affordable Homes

https://www.irishtimes.com/business/...arns-1.4392410

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The housing crisis will be a “permanent issue in Irish society” unless there is a radical rethink on how to deliver more affordable homes, industry body Irish Institutional Property (IIP) has warned.

In a report, the group warns that the supply of new homes is grossly out-of-kilter with demand and that this mismatch is “intrinsically linked” to affordability.

As many as 47,000 homes will have to be built each year for the next five years just to meet demand, it says, while noting that the Government’s target in Project Ireland 2040 is just 25,000.

It estimates that Dublin alone needs an additional 125,000 apartments to meet demand.
Quote:
IIP also insists that land costs, often cited by critics of the State’s housing policy as a key driver of costs, is not a major expense and typically range from 8 to 18 per cent of the total delivery costs.

The report suggests there are certain costs that the private market must pass onto buyers and renters such as land, VAT and levies.

It suggests that these costs could be “subsumed” or “loaned” by the State to bring down the delivery cost of both housing and apartments.

“This policy may require the State to forego this cost in the short to medium term by way of an equity loan or home equity share arrangement as European Union market rules may not allow them to be forgone totally,” it says.
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28-10-2020, 13:24   #2
brisan
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if the state forgoes these costs the developer will still charge the same and pocket the rest
Property is not sold for what its worth or cost ,it is sold for the maximum achievable price
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28-10-2020, 21:08   #3
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if the state forgoes these costs the developer will still charge the same and pocket the rest
Property is not sold for what its worth or cost ,it is sold for the maximum achievable price
Claims land costs 8-18% are not a major cost, what nonsense! Land needs to be taxed until it’s 1% or less of the development cost.
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28-10-2020, 21:43   #4
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Claims land costs 8-18% are not a major cost, what nonsense! Land needs to be taxed until it’s 1% or less of the development cost.
1%? How would that work? Sounds like something the PBP or Sunny Fein would propose. What’s the incentive to see your property if it is taxed that heavily?
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28-10-2020, 22:06   #5
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1%? How would that work? Sounds like something the PBP or Sunny Fein would propose. What’s the incentive to see your property if it is taxed that heavily?
It’s actually Not that far off Fianna Fail’s policy Prior to getting into government.

“Fianna Fáil supports the implementation of the Kenny Report from the 1970s to put a cap on the price of land sold for housing, according to Fianna Fáil leader Micheál Martin.

Mr Martin has asked the party’s justice spokesman, Jim O’Callaghan, a senior counsel, to examine whether the Kenny Report could be implemented without the need for a referendum on the right to own private property.

In 1973, Judge John Kenny recommended in the Report of the Committee on the Price of Building Land that building land should be compulsorily acquired by local authorities at no more than 25pc more than its agricultural value.”

Irish times link: https://www.irishtimes.com/news/irel...rtin-1.3646449
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28-10-2020, 22:28   #6
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1%? How would that work? Sounds like something the PBP or Sunny Fein would propose. What’s the incentive to see your property if it is taxed that heavily?
Development land is way too expensive as wealthy people have brainwashed governments into collecting taxes through wages and services instead of assets.

I’m not talking about home taxes, only heavily taxing land hoarders and vacant/underused sites. Look at McWilliams latest article in the Times
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28-10-2020, 22:52   #7
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Development land is way too expensive as wealthy people have brainwashed governments into collecting taxes through wages and services instead of assets.

I’m not talking about home taxes, only heavily taxing land hoarders and vacant/underused sites. Look at McWilliams latest article in the Times
I would agree that rezoning of land should address costs. Also entities that buy / hoarse speculatively. However I think it is a more complicated subject. What about a regular person with a large garden at the side of their house - if the apply for planning and then put the “site” up for sale should they be so heavily taxed? What about the impact on banks balance sheets in terms of the values of property they granted mortgages on? Many that already owns a property would be in immediate negative equity. That’s fine for people who don’t want or need to move. What about people starting families that need to trade up? It’s a lot more complicated than just taxing or limiting prices.
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28-10-2020, 23:15   #8
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I would agree that rezoning of land should address costs. Also entities that buy / hoarse speculatively. However I think it is a more complicated subject. What about a regular person with a large garden at the side of their house - if the apply for planning and then put the “site” up for sale should they be so heavily taxed? What about the impact on banks balance sheets in terms of the values of property they granted mortgages on? Many that already owns a property would be in immediate negative equity. That’s fine for people who don’t want or need to move. What about people starting families that need to trade up? It’s a lot more complicated than just taxing or limiting prices.
There will naturally be winners and losers but in the long term it’s for the benefit of society. It could also be done progressively rather than all at once.

Why should a farmer making 30k a year get 30 million for a few fields, paid for by all the home owners that end up buying homes on those fields. Wouldn’t it benefit society if the site cost went way down? While the developer/Brickie will charge the maximum the market will take they could also make profit off lower home prices if site values are lower.

Instead vested interests want the government to continue to give huge windfalls to the very few and to date they have got their way!
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28-10-2020, 23:35   #9
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29-10-2020, 09:51   #10
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Hi, interesting discussion.


I personally feel it's not a good road to go down, one where land is artificially kept cheaper. Landowners should be entitled to get market value for their land like any other person selling an item, asset and so on.


I think following the UK and having no VAT on new builds would be a very quick and easy way to reduce costs. The builder is not benefiting so it would hopefully not cause prices to shoot up and would cut prices by 13.5% in an instant.
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29-10-2020, 10:33   #11
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Hi, interesting discussion.


I personally feel it's not a good road to go down, one where land is artificially kept cheaper. Landowners should be entitled to get market value for their land like any other person selling an item, asset and so on.


I think following the UK and having no VAT on new builds would be a very quick and easy way to reduce costs. The builder is not benefiting so it would hopefully not cause prices to shoot up and would cut prices by 13.5% in an instant.
This would work fine if land wasn’t essential to society. I don’t propose taxing farm land either just to bring back the windfall tax for change of use and heavy taxation to prevent obsolescence. Many city centre buildings are dilapidated due to the inexpensive cost of holding them. We shouldn’t be incentivising this.

We have laws in other sectors for the benefit of society such as young people subsidising health insurance premiums of older people so health care is affordable for all. Or social welfare.

The UK model which incentivises urban spread is a total disaster! Reducing VAT on new builds only increased land prices further! However, if the Govt received the windfall from land and made most of the gain from it then yes, it could reduce VAT in times of depressed prices on new builds so the Brickie can keep on building. Following the UK model led to a total collapse in construction post 2009 and we are still dealing with the consequences.

What you propose is total capitalism! It would be fine if land wasn’t so essential but it definitely is.

Last edited by Smouse156; 29-10-2020 at 10:37.
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29-10-2020, 18:20   #12
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Originally Posted by Smouse156 View Post
Development land is way too expensive as wealthy people have brainwashed governments into collecting taxes through wages and services instead of assets.

I’m not talking about home taxes, only heavily taxing land hoarders and vacant/underused sites. Look at McWilliams latest article in the Times
You should also tax people who dont fill every bedroom in their homes with lodgers while you're at it.
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29-10-2020, 20:27   #13
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Originally Posted by Smouse156 View Post
There will naturally be winners and losers but in the long term it’s for the benefit of society. It could also be done progressively rather than all at once.

Why should a farmer making 30k a year get 30 million for a few fields, paid for by all the home owners that end up buying homes on those fields. Wouldn’t it benefit society if the site cost went way down? While the developer/Brickie will charge the maximum the market will take they could also make profit off lower home prices if site values are lower.

Instead vested interests want the government to continue to give huge windfalls to the very few and to date they have got their way!



Farmers don't get 30m for a few fields. Not unless you know there are plans for a prison and you have a relation who is a senator.


Most land suitable for development is land banked by developers.


What would happen in the case of a land cap would simply be that developers would use it to buy up land on the cheap...........then they'd still sit on it to create undersupply so that they could make even more.



The only solution to the problem is to have a levy on land zoned for development but not actually being developed. There is plenty of it around, often being sat on for decades.
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29-10-2020, 20:49   #14
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You should also tax people who dont fill every bedroom in their homes with lodgers while you're at it.
Ok vested interests
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29-10-2020, 20:51   #15
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Farmers don't get 30m for a few fields. Not unless you know there are plans for a prison and you have a relation who is a senator.


Most land suitable for development is land banked by developers.


What would happen in the case of a land cap would simply be that developers would use it to buy up land on the cheap...........then they'd still sit on it to create undersupply so that they could make even more.



The only solution to the problem is to have a levy on land zoned for development but not actually being developed. There is plenty of it around, often being sat on for decades.
Well yeah, a levy is the same as taxing it. Just so the price comes down and they can’t hoard it.
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