asked the Minister for Finance if he will introduce legislation to reduce VAT on all building materials for private dwellings.
Ceisteanna—Questions. Oral Answers. - VAT On Building Materials.
6.
When the VAT system was introduced in 1972 the effective rate on private dwellings erected under normal building contract arrangements was 3.156 per cent on the tax exclusive cost of the building, regardless of the rate of tax applicable to the materials used. Since March last the effective rate is reduced to 3 per cent. Any modification would fall for consideration in the context of the annual budget.
Would the Minister agree that the VAT on materials can be a fairly substantial cost in the building of a new house? In view of the fact that grants are not now available to people in certain categories, would he not accept that there is an argument for reducing this VAT still further?
There are arguments in favour of reducing many taxes, including this one. It is my ambition and desire to respond to them, but against any desirable tax reduction has to be set the necessity to collect revenue to meet necessary public expenditure. This is but one of the taxes that must be looked at in the total budgetary situation.
Would the Minister not accept that the practice of people building their own houses is desirable and that he would be encouraging that practice by removing the present restrictions?
I have no doubt that reduction in costs would encourage further production of any commodity, including dwellings. This is one of the matters that will have to be borne in mind when considering what will be the correct tax package. I can assure the Deputy that I will be disposed to consider the construction industry favourably.