The 2008 Irish budget has been welcomed by the property industry, according to property consultant CB Richard Ellis (CBRE). Characterising it as a prudent budget, the company declared it would support property market performance in the medium term. Marie Hunt, director of research at CBRE, Ireland commended minister Brian Cowen for reforming stamp duty in the second-hand housing sector, citing 2007 stagnation due to weak buyer sentiment, oversupply and rising interest rates.
The 2008 Irish budget has been welcomed by the property industry, according to property consultant CB Richard Ellis (CBRE). Characterising it as a prudent budget, the company declared it would support property market performance in the medium term. Marie Hunt, director of research at CBRE, Ireland commended minister Brian Cowen for reforming stamp duty in the second-hand housing sector, citing 2007 stagnation due to weak buyer sentiment, oversupply and rising interest rates.
With evidence that new house completions were reduced by as much as 30% in 2007 the budget was lauded for injecting the confidence necessary to spark increased activity in the coming year. Buyers still face a high level of transactional tax. After the reform the first EUR 125,000 of a housing transaction will be exempt while the remaining balance will be charged at a flat rate of 7% up to EUR 1 mln and 9% over that amount.
CBRE also expressed support of the budget measure to increase mortgage interest relief for first-time buyers. Another positive factor mentioned was the effect of further research and development investment on the commercial property sector. One disappointment came when the government didn’t reform of stamp duty on commercial property transactions. 'The rate of stamp duty on commercial property transactions in this country remains prohibitively expensive at a flat rate of 9%. As a result, Ireland is the only country in the EU with no cross-border property investment and of the EUR 12 bn that will be invested by Irish investors in commercial property in 2007; EUR 10 bn will be invested outside of the domestic economy. This is a lost opportunity,' said Hunt.