The expansion of the State’s help-to-buy scheme will help “thousands more people get on to the property ladder”, Minister for Housing Darragh O’Brien has said.
The scheme, which has been in effect since January 2017, was previously limited to a tax rebate for first-time buyers worth €20,000, but the stimulus package has raised this ceiling to €30,000.
The rebate is only available on a new home a first-time buyer is either purchasing or building to be their primary home. In order to claim the tax back, the purchaser must have paid at least the figure being claimed to the Revenue in previous years, either through Dirt or income tax.
There was significant criticism of the scheme when it was introduced, with some saying it had the potential to drive up house prices in an inflationary manner. However, while successive governments have toyed with the idea of ending the scheme , it was extended again in the last budget.
No inflation
Taoiseach Micheál Martin said he did not believe the scheme would inflate property prices, but that it would rather improve affordability. “It will help along with other measures to help the housing market and improve affordability,” he said, adding that he did not believe the scheme had pushed up prices to date.
Mr O’Brien said he was “delighted” the scheme was being expanded. Other measures introduced by his department, he said, would boost the social housing stock and enhance the water leakage reduction programme.
Some 2,000 social housing units will be targeted for refurbishment in order to be relet to individuals and families in homelessness or on the housing list, in a move the Minister says will create 360 jobs.
“The July stimulus is about economic recovery and looking after those most impacted by the Covid-19 pandemic. It’s a way to turbo-charge our economy, secure local jobs, and [give] a boost to those who need it most,” he said.
The Irish Homebuilders’ Association (IHBA), a body representing developers, welcomed alterations to the help to buy scheme and a temporary VAT reduction.
James Benson, a spokesman for the group, said the supply of new homes in the State is running well behind what was needed and average earners cannot afford homes.
“Based on the latest data available, backed up by what our members are seeing on the ground, it is likely that only 14,000 new homes will be completed in 2020,” he said.
