The Government must accelerate home building to meet the need for 93,000 homes every year into the next decade, Davy stockbrokers has urged in a pre-budget submission.
The stockbroker said infrastructure gaps risk damaging the competitiveness of the Irish economy.
“Although there is much about Ireland’s economy which remains strong, including a skilled workforce and favourable demographics, infrastructure gaps, especially in housing and energy, risk undermining our competitiveness,” the document said.
“While recent policy moves are favourable, particularly reforms to the rental sector expected to boost investment while strengthening the rights of tenants, our performance in meeting our annual housing targets has not been strong.”
READ MORE
Davy called for the Government to accelerate homebuilding in order to meet the need for homes in the 2030s that its analysis has identified. It said at least 93,000 new homes will be required annually.
It has also urged the consideration of policies to accelerate investment in renewable energy and to broaden tax supports for private investment in sustainable enterprise.
The firm said that “sustained public and private investment” in housing and renewable energy is needed to “support a growing workforce and to position Ireland as a leader in the green economy”.
Davy also called for the next budget to address retirement security. The firm noted that, while life expectancy is rising, the burden of financial wellbeing post-retirement is increasingly placed on employees.
Despite this, Davy noted that public engagement with retirement planning is low, which it said is not helped by relatively high levels of complexity across pension taxation and related products.
[ Central Bank ‘surprised’ by lack of progress in building homesOpens in new window ]
The stockbroker said its view is that the budget must include a “significant investment” to develop the national awareness of the importance of pensions, and investing in them early.
Davy also called on the Government to adjust the small gift exemption in line with inflation, having stood at a limit of €3,000 since 2003, as well as a carrying out a full review to the tax thresholds following on from adjustments made to the system in the past budget.
The firm reiterated its Budget 2025 recommendations that the Government should create tax incentives to encourage listings in the budget, aiming to rejuvenate the domestic stock exchange, Euronext Dublin, and to establish an Irish equity market growth fund.
The submission also said the tax treatment of investment funds is leading to the under-diversification of household portfolios and “not only limits long-term wealth growth potential” but also “poses broader economic risks” amid Ireland’s ageing population.
The tax system, under which investment funds are taxed 41 per cent on unrealised gains every eight years – the deemed disposal rule – stands above the 33 per cent capital gains taxation on other investment asset classes upon the realisation of the gain.
Davy called on the Government to address this disparity in the upcoming budget, by removing the deemed disposal rule and aligning the tax rate to 33 per cent.
