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News Release

Dublin

Jones Lang LaSalle welcomes the property measures in the Budget 2014


Hannah Dwyer, Head of Research at Jones Lang LaSalle said that “I broadly welcome the property measures introduced in the Budget this year, as the Minister for Finance has looked to build on the nascent recovery we have already started to see in the property market in the last 12 months. Extension of the CGT relief, further support for REITs, and measures to enhance Ireland’s competitive advantage will continue to boost investment into Ireland. There are also Budget property measures focused on stimulating areas of the property sector that need additional encouragement, such as construction activity, the retail sector and residential supply”.

The extension of the CGT tax relief to the end of 2014 and the expansion of the REIT legislation will further encourage investment activity in the property sector and will help to broaden the depth and type of capital available.
The news that NAMA will be supporting housing and office construction will help to boost these sectors and deliver much needed homes and office space, particularly in Dublin city centre. The announcement that NAMA will also be providing investment in commercially viable retail projects will also support the retail sector which is still faced with significant challenges. The Agency has also announced that it will be making available of €2bn of vendor finance to fund Irish projects in the next 2 years.

It is positive to see that the Government has recognised the need to promote Ireland’s competitiveness and has expressed its commitment to keeping its 12.5% Corporate Tax Rate. Measures that are focused on stimulating investment and innovation, such as the R&D Tax Credit increase to 15% and the Removal of Stamp Duty charges on shares listed on Enterprise Securities Market, will help to encourage foreign direct investment into Ireland and help to create additional employment, particularly in highly skilled, high value sectors.

The hotel sector will be relieved to see that the 9% VAT rate has remained for the tourism and hospitality sector. Hotels were impacted significantly by the property crash, but has shown some resilience in the last 12 months. The freezing of the VAT rate will help to further stabilise this part of the property sector.

The introduction of the Home Renovation Incentive will act as a stimulus to the construction industry and will support tax compliance from homeowners.