Danny Healy-Rae urges incentives for smaller homes
Danny Healy-Rae raised concerns about rising house-building costs and asked the government to consider relief on VAT, taxes and levies and additional incentives for smaller homes. He proposed increasing the first-time buyer grant for people who build smaller houses to curb oversized builds and reduce costs.
Danny Healy-Rae said the cost of building a new house can be around 400,000 euros for a young couple, attributing part of that to VAT, taxes and levies. He highlighted that many new homes are being built at 2,500 to 3,000 square feet and cited construction costs of roughly 250 to 300 euros per square foot.
He suggested incentivising the construction of smaller houses — citing a benchmark of under 1,350 square feet as an example — and asked whether the first-time buyer grant could be increased or supplemented to encourage smaller builds. He framed the proposal as a way to lower overall costs and reduce the financial burden on first-time builders.
The Taoiseach replied that development levies were waived for a significant period, which led to unprecedented levels of commencements in 2023 and 2024, followed by a lower level afterwards. The Taoiseach said the government is pursuing a range of housing initiatives, keeps policy under constant review, and regards existing supports such as Help to Buy and the first home grant as generous when combined.
The waiver of development levies was credited with a substantial increase in commencements in the two years prior to this year. The government noted the subsequent decline in commencements after that restricted waiver period.
The Taoiseach indicated the proposals would be examined as part of ongoing policy review but did not commit to immediate changes to VAT, taxes, or the size-based incentives proposed by Danny Healy-Rae.
Issue raised
Danny Healy-Rae said the cost of building a new house can be around 400,000 euros for a young couple, attributing part of that to VAT, taxes and levies. He highlighted that many new homes are being built at 2,500 to 3,000 square feet and cited construction costs of roughly 250 to 300 euros per square foot.
Proposed incentive for smaller homes
He suggested incentivising the construction of smaller houses — citing a benchmark of under 1,350 square feet as an example — and asked whether the first-time buyer grant could be increased or supplemented to encourage smaller builds. He framed the proposal as a way to lower overall costs and reduce the financial burden on first-time builders.
Government response
The Taoiseach replied that development levies were waived for a significant period, which led to unprecedented levels of commencements in 2023 and 2024, followed by a lower level afterwards. The Taoiseach said the government is pursuing a range of housing initiatives, keeps policy under constant review, and regards existing supports such as Help to Buy and the first home grant as generous when combined.
Past measures and effects
The waiver of development levies was credited with a substantial increase in commencements in the two years prior to this year. The government noted the subsequent decline in commencements after that restricted waiver period.
Next steps mentioned
The Taoiseach indicated the proposals would be examined as part of ongoing policy review but did not commit to immediate changes to VAT, taxes, or the size-based incentives proposed by Danny Healy-Rae.
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Transcript
very much, Taoiseach. The cost of building a new house is somewhere around 400,000 euros for a young couple or someone trying to build a house. They're saying that a total of the actual building cost is VAT, taxes and levy. Could the government consider doing anything about that? The other thing is, along with the first-time buyer's grant, I wonder could it be increased if people were incentivised to build a smaller house like we used to do back in the 70s and 80s. Any house built under 1,350 square feet, now I'm not saying that we should base the bar around there, but maybe somewhere in between. People are building houses from 2,500 square feet up to 3,000 square feet. Every square foot costs somewhere between 250 and 300 euros, and it's increasing the cost of the house. People are burying themselves. If you could incentivise them to build a smaller house and give them some bit of a grant in addition to the first-time buyer's grant, I'm asking you to consider that. Two things. First of all, on costs, we did waive the development levies for a significant period of time, which did result in unprecedented levels of commencements over the last two years prior to this year. I mean, the commencements in 24 and 23 were a very, very significant, massive increase in commencements because of waiving development levies for a restricted period. Hence, you then, after that, had a lower level of commencements. But in terms of, you know, the government obviously is doing a whole range of initiatives on housing. We, everything is kept under constant review. I'm not sure about, I look at your proposal, but I mean, the help to buy is quite generous as it is, and so is the first home grant, and combined they give very significant supports to first-time buyers, but we certainly examine it. Thank you.