Aiken PR

The Briefing

Attracting Brexit financial services refugee companies is all about property

by Aiken PR

04/10/2017

acca

According to ACCA, the global body for professional accountants, tax incentives will not help to attract senior corporate staff based in London to relocate to Dublin and it has called on the Government to implement a range of measures to support commercial property, housing and investment in regional towns.

The professional body’s Ireland and UK offices developed a series of comparative cost of living metrics to assess if tax incentives would support influential UK Executives to relocate businesses to Ireland.

The study found that that there was negligible difference between the two cities when taking into account all remuneration, taxes and external costs and to support inward investment ACCA has called on the Government to:

  • Implement tax reliefs for new commercial property with high standard specification in non–rent controlled zones to support economic hubs in regions where staff can find affordable homes
  • Devise planning laws that disincentives overnight short term letting of residential property, within rent pressure zones alleviating the use of property zoned for long term residential use being used as a substitute for hotel accommodation. 
  • Restrict interest relief for rental income from overnight short term letting of residential property, to offset tax lost by incentivising longer term letting.
  • Fund the housing associations to purchase or long–term lease uninhabited properties to bring them back into use. 
  • Implement full interest relief for new to rental market e.g. renovated residential property. 
  • Implement full interest relief for long term residential rental property 

According to ACCA, promoting the availability of quality commercial property of substantial size in towns that are not rent pressure zones and where residential property is more freely available is not only a long–term solution in helping to address Ireland’s Dublin–centric economic challenges but also the pending housing crisis.

The professional body stated that building more commercial property in Dublin will only exasperate the already difficult residential market. 

Commenting, Liz Hughes, Head of Ireland and Mainland Europe ACCA, said: “Linking any tax incentive to non–rent controlled zones and limiting the tax incentive to property of a substantial size will ensure that more affordable options are available to support FDI as well as the relocation of indigenous based companies.  These options are more sustainable and will not further overheat the residential property market. 

“The housing challenges we currently face are being exasperated due to properties being rented on a night by night basis without having the correct zoning or planning permission.  These properties are being denied to long term residents and by decreasing the overall supply of property, and are unsustainably inflating the rent on the rest of market. We want to see Councils strictly imposing the planning laws and stamping out these illegal short–term rentals. Short term rentals by their nature yield a much higher rent than long term rentals.  The Government could rebalance the marked by reducing the interest deductible for short term and restore the interest relief on long term rentals to 100%.”

Liz concluded: “Rent pressure zones identify areas where property supply is an issue and providing a simple point of reference for targeted tax interventions outside these zones will alleviate the uneasy upward pressure on the property market.  If 3 or 4 financial services employers in London or indeed Dublin relocated to a non–rent pressure zone, it would not only provide better sustainable growth and support the rural economy but would also help alleviate the growing property challenges in the Capital.” 

ENDS