VAT on apartment construction contracts
Deputy Burke warned that a technical VAT issue could undermine the announced reduction from 13.5% to 9% for the building sector where housing agencies own the land. The Taoiseach said the Finance Minister has set out the position, the finance Bill is coming before the House, and Deputies should engage further with the Minister.
I welcome the reduction in VAT from 13.5% to 9% in the building industry. I understand there is a technical issue, however. If a housing agency owns the land and engages a contractor to build apartments, the builder will have to collect 13.5% rather than 9%. This will have an adverse effect on a number of projects in the Taoiseach's constituency, with which he and I are familiar. The landowner engages with the contractor on a building contract. My understanding is that VAT is proposed on sales, not on construction. A detailed letter was sent to the Department of Finance last night by Property Industry Ireland, setting out where it needs appropriate amendments to deal with this issue. The owner of the land does not get the VAT reduction and will have to charge 13.5% on the building. I ask that this be clarified.
Comment on this
The Minister of Finance has been clear in respect of that. I understand that the finance Bill will be coming before the House next Tuesday. It has cleared Government. I am sure Deputies will engage with the Minister in respect of that and with the Government more broadly.
Comment on this
I can give the Taoiseach a copy of the letter.