IBEC’s director of lobbying and influence, Fergal O’Brien has called for tax changes that could see the cost of buying a new home drop by “€30,000 overnight” .
Mr O’Brien was responding to a new report by the employers body which found that housing challenges were directly impacting the economy as businesses cannot fill positions.
The report warns that Ireland's competitiveness and attractiveness as a place to live are being harmed.
The IBEC survey of CEOs found that over 70 per cent of companies identified the availability of housing for staff as a challenge to their business in 2023 - with 30 percent identifying it as a major challenge.
Over 27 per cent of businesses identified the impact of housing availability on employees as one of their top three external priorities.
Mr O’Brien told Newstalk Breakfast that the issue of housing was stopping firms from growing.
“Businesses have been saying to us for some time that it has been causing difficulties in terms of their own growth and expansion plans. It has really moved to an unprecedented extent, to the degree to which it's actually stopping businesses from being able to fill positions, from being able to hire and expand.”
The issue was no longer just a social problem, it was a real economic problem. Something had to be done to bring down the cost of housing immediately, he said. New homes should not be taxed so severely.
A VAT refund to the buyer of a new home would reduce the cost of a typical new home (value of €400,000) by €30,000, said Mr O’Brien.
The State was going to have to play a bigger role through agencies such as Home Building Finance Ireland, he said.
There were a number of measures in the short and medium term which could be introduced.
“We have €150 billion sitting in Irish bank accounts, in savings, some of which could be put to use in the appropriate way to fund housing development and that shouldn't be beyond us,” he added.