The Construction Industry Federation (CIF) today reiterated its call on the Government to reform the rates of stamp duty.
The building lobby group said that to restore confidence in the house building sector, the Government should reduce the top rate of stamp duty down from 9 per cent to 5 per cent.
Tom Parlon, director general designate of the CIF, said output of new homes next year could fall to as low as 45,000 units, and that this
would have significant implications for the numbers employed in construction and for Exchequer receipts.
Mr Parlon said that according to the ESRI and the Department of the Environment, Heritage and Local Government, there is a requirement for 65,000 new homes annually for the next five or six years. However, demand and supply have fallen back because of the lack of confidence in the market at present and as little as 45,00 homes could be built next year, he added.
"This makes it an imperative that confidence be restored to the housing sector sooner rather than later so that a serious shortfall in housing completion numbers does not occur in key growth areas," the former Progressive Democrats junior minister said.
"Reducing the current penal top rate of stamp duty from 9 per cent to 5 per cent would help kick-start activity in the housing market," he said.
Mr Parlon said the 9 per cent top rate was introduced in 2000 when there were concerns about overheating in the economy. "Those concerns don't apply today, and the 9 per cent rate is actually limiting the number of transactions taking place."
The latest Permanent Tsb/ESRI house price index, published yesterday, shows prices fell again in August to bring the rate of decline to 3.3 per cent since the start of the year.
The index shows house prices nationally fell 0.3 per cent in August following on from a 0.4 per cent drop in July.