According to Aidan Gavin, Managing Director, Cushman & Wakefield Ireland, “Budget 2021 was unprecedented in its scale for the Irish economy, with the backdrop of the ongoing pandemic combined with the risks surrounding Brexit framing the discussion. From a commercial property perspective, there are several policies which are positive but also those which raise talking points for the sector."
For the hotels sector, the change of VAT from 13.5% to 9% is welcomed and a vital support for a segment of the market which has been decimated by the pandemic. The clarity of no cliff edge for the employment wage subsidy scheme (EWSS) and the new Covid Restrictions Support Scheme (CRSS) for businesses whose operations are impacted by level 3 and above restrictions are also all laudable and will provide some relief.
However, Aidan Gavin noted “While the extension of the waiver of commercial rates out to year-end is a positive, perhaps it represents a missed opportunity. Given Budget 2021 was planned on the assumption of a no deal Brexit and the pandemic persisting next year, the waiver for just an additional quarter falls short.”
Elsewhere, the announcement of a tax credit for the digital gaming sector may prove positive for the office sector. Although more details are needed, the expansion of the tech sector and tech employment are key drivers of occupier demand at present. In Dublin we have seen the influx of social media companies and their footprint expanding, while in Cork, cyber security has witnessed accelerated growth.
Lastly, with PRS accounting for a growing share of the investment market in Ireland, commercial eyes also looked towards housing in today’s budget. The extension of the Help to Buy scheme and the increased expenditure on social housing were to some extent anticipated and applauded elements. The addition of 9,500 additional homes through new-build activity is welcomed, however a disappointing rise on the existing rebuilding Ireland targets. Gavin noted: “Overall the combination of social housing delivery and the housing capital programme is positive, however also lacked detail in some parts. The introduction of €110 million in the new Affordable Purchase Shared Equity Scheme aimed at aiding first time buyers and funding cost rental homes requires much more detail on how it will function.”
