Housing shortage in capital ‘driving employment abroad’

The accommodation shortage in the capital coupled with remote working trends are “driving employment abroad”, Dublin Chamber has warned.

In its pre-budget submission the chamber calls for the Government to prioritise investment in urban infrastructure and to look at tax incentives aimed at increasing the supply of talent.

An increase in the zoned land tax, where unused land zoned and serviced for housing is taxed, and the introduction of a vacant property tax could boost the provision of housing, the chamber said.

“Housing is our top priority,” said Aebhric McGibney, director of public and international affairs at Dublin Chamber. “We need to see Government build more and penalise vacant sites where they are not being developed for housing. We, therefore, propose an increase in the zoned land tax and the introduction of a vacant property tax.”

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The chamber also wants the Government to maintain the planned carbon tax increase, announced in Budget 2022. However, it said all revenues generated through the tax should be ringfenced for investment in green infrastructure, public transport, and funds that will support communities and businesses to transition to green transport and heating alternatives.

In addition, Dublin Chamber has called for the introduction of a “return-to-work” tax credit aimed at encouraging second earners to return to or take up work following the pandemic. The chamber said that as it stands the State’s marginal effective tax rate of income tax “acts as a deterrent to a second earner” because “the entry level for the highest rate of income tax is very low”.

A return-to-work credit of around €5,000 could incentivise second earners, particularly women, to take up work. The credit would, “would overcome the disincentive faced by many couples where one person is working”, Mr McGibney said. “If the second person returns to a full-time job they lose a lot of tax breaks and have to earn a lot of money before they break even.”