As we have failed to build enough houses to ease the current housing crisis, Don Colleran believes there is another solution.
Delays with planning and the increase in costs in providing infrastructure for new housing developments are likely to continue for a while, so it is highly unlikely we are going to build enough houses in the next 10 years to solve this crisis. A recent survey in Co Clare stated one in six houses was vacant.
While there is no similar survey of the Galway housing stock, Don believes through his own experience that there are more than 1,000 empty houses in Galway city at the moment. Not derelict homes, but houses suitable for immediate occupancy or with very little work required. These homes are vacant for a variety of reasons, some are holiday homes, but very rarely used. Many are vacant because occupants have passed away and families have decided to leave them empty rather then rent because they decide “its not worth the hassle”.
Where Don sees vacant houses every week is in the older, established, much sought-after areas of Galway, such as Renmore, Mervue, the city centre, Newcastle, and Salthill, where the occupants have either passed on, moved in with their family, or moved to a nursing home. Most of these houses are suitable for immediate occupancy but for many reasons, some personal, they remain empty.
The Government is now talking about introducing a tax on vacant houses, but this is not the solution as the stick approach does not work as well as the carrot when it comes to land and property. One of the solutions is very simple and easy to introduce, resulting in immediate benefits to everyone: that is, tax relief on rental income from these vacant properties.
"Now, remember we are in a crisis and to get out of this crisis decisions will have to be made that are not agreeable to everyone," Don says. "What if the owners of these houses, rather than leave them empty, were allowed to earn rental income of €15,000 per annum tax free for the next three years, provided they cap their rent at €15,000, and any rental income to property owners in nursing homes would not affect their fair deal arrangements.
"Some changes were made recently to the fair deal scheme to allow the home to be let out but they were not enough as most of these homes remain vacant when the owners move into nursing homes. The Government would lose nothing because these houses would otherwise be left empty. Tenants' rents could be halved if they were lucky enough to secure one of these houses, giving them a better chance to save for their own house."
Like with any tax relief system there would be pros and cons, but Don says we are in a crisis and high rents are pushing families into poverty and costing the State millions in rent subsidies. "As we can’t build houses quickly enough, let us look again at all the vacant houses we do have and what incentives can be given to encourage owners to rent them rather than leave them empty."
