The estimated cost and impact of recent changes to the Government’s Help to Buy scheme are subject to a high degree of uncertainty, the Parliamentary Budget Office (PBO) has warned.
The fiscal oversight body assessed 60 different policy measures announced in Budget 2025 to gauge how robust the data, modelling and expected behavioural impact of the measures were.
It found that the modelling in relation to a decision to extend the Help to Buy scheme (which offers tax rebates to first-time buyers) out to 2029 contained a high degree of uncertainty.
In particular it said the cost estimate – put at €185 million per year – was based on 2023 out-turn data while there were “key uncertainties” relating to future house prices, demand from first-time buyers, new housing completions and loan-to-value ratios.
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“The scheme’s take-up rate is also uncertain due to the policy’s long-term extension, which may influence behaviour,” the PBO said.
The behavioural impact of the government’s decision to apply a new 6 per cent stamp duty rate for residential properties above €1.5 million, dubbed the mansion tax, was also deemed highly uncertain.
“There may be some clustering around and just below the new threshold,” the PBO said while noting the main uncertainty lies in the behavioural response to the policy, particularly its impact on property transactions and prices.
“Modelling property market indicators, such as house prices and transactions, further adds to this uncertainty,” it said.
In assessing 60 budgetary measures, the PBO noted that over 50 per cent of these were tax policies, while 22 per cent were related to social protection. The government’s “data” had the lowest uncertainty, whereas “modelling” had the highest. Significant “behavioural” uncertainty was noted in tax measures.
Eight policy measures involved tax increases, projected to generate €551 million while the remaining 52 policy changes were estimated to cost €4.33 billion.
Robust budgetary costings of new policy measures are crucial for effective management of the public finances,” the PBO said.
“To enable thorough budget scrutiny by the Oireachtas, clear information on the methodology and data used for these costings is essential,” it said.
