Dáil Éireann Debate, Tuesday - 11 July 2017
139. Deputy Barry Cowen asked the Minister for Finance the estimated cost of introducing a new affordable housing tax incentive for private housing developers whereby developers could claim back 100% VAT relief on all housing or apartment units delivered within a build to rent development that are sold or rented out to eligible recipients at affordable levels (details supplied). [32384/17]
View answerVAT is governed by the EU VAT Directive (Council Directive 2006/112/EC), with which Irish VAT law must comply. Under the VAT Directive, the letting of residential property is exempt from VAT and therefore developers of such property are not entitled to VAT deductibility on their development costs where they let the property. Their rental income from these lettings is exempt from VAT. A property developer is liable for VAT on sales of developed residential property and is entitled to recover the VAT incurred in the development of that property. Under the VAT Directive there is no scope to allow VAT deductibility in relation to the development of properties that are to be put to a tax exempt use.
