Latest News

We broadly welcome many of the property related measures included in Budget 2012.  However, the most notable announcement is the Government’s admission that the proposal to retrospective ban upwards only rent reviews in business leases is unworkable and will be shelved. This news is long awaited with effectively a year wasted while the Government procrastinated. The delay has been to the detriment of the commercial investment market where considerable inward investment has been lost.

We also welcome the reduction in stamp duty to 2% for commercial property and land, which is effective immediately.   We believe that now is the correct time to introduce such a measure as revenue foregone is minimal when compared to the height of the market. 

According to James Nugent, incoming Managing Director of Lisney, “Both of these measure should help kick start the investment market. In relation to the rent review issue, the Government’s indecision has created many difficulties in the commercial property sector. Landlords and their banks have been unable to sell assets, which might otherwise have been sold. International investors have avoided Ireland and taken a very negative view of the country. In spite of this, we believe that the introduction of these measures will see the return of international investors who will again seriously consider investing in Ireland. Consequently, we believe that 2012 will be a far better year for the investment market and turnover will be significantly greater than the €174m experienced this year to date”.

Further announcements in the budget such as increases to mortgage interest relief and a waiver to Capital Gains Tax on properties purchased between now and 2013 are also welcomed. However, the latter will require some clarification as to whether the wavier applies to both residential and commercial property. 

We believe that the €100 household charge introduced is equitable and is not just a city charge. Acknowledging that a broader tax base is required, we are of the view that the further advancement of this charge (through a residential property tax) must be part of a move from a transactional-based tax system to an occupational-based one, i.e. a trade-off between lower stamp duty and increased annual property taxes. 

As regards other non-property matters, we welcome the Government’s commitment to maintaining the 12.5% corporate tax rate, which is critical for inward investment and expansion of multi-nationals. However, we do believe that the increase in VAT to 23% will further hinder struggling retailers.  Many retailers will not be in a position to pass on this increase and will suffer additional erosion of their margins.