Paul Murphy
Question:85. Deputy Paul Murphy asked the Minister for Finance the cost of the help-to-buy scheme on an annual basis; and if he will make a statement on the matter. [40570/17]
View answerTuesday, 26 September 2017
Questions (85)
Written answers
The Help-to-Buy incentive aims to both assist those first-time buyers struggling to save for the deposit required to purchase a house, as well as incentivising additional building and the provision of extra housing stock. At the time of Budget 2017 my Department estimated that the Help-to-Buy incentive would cost €40 million per annum for 2018 and 2019 and €50 million in 2017 due to the back-dating of the relief in respect of properties which became eligible for the incentive between 19 July 2016 and the end of that year. Currently, these estimates remain valid.
To avail of the incentive involves two stages. Stage 1 is the application stage, wherein prospective applicants can query whether they qualify for the incentive. They can also get clarity on the maximum amount of rebate they could potentially benefit from, based on their tax paid in a four-year period. Stage 2 is the claims stage, wherein applicants that decide to proceed with purchasing or building a qualifying property must provide documentary evidence of the relevant property transaction or their mortgage draw down.
The estimates for the potential cost of the incentive that have featured in recent media reports are based on the number of applications received by Revenue to stage 1 of the scheme, rather than the number of claims to date. However, many of these applicants may never make a claim to stage 2 for a variety of reasons. These could include individuals who do not go on to obtain mortgage approval, who may decide to purchase a second-hand property, or who are not able to source the new home that they desire.
As of 31 August 2017 Revenue has received 9,629 applications to stage 1 of the Help-to-Buy incentive; of these, 6,626 have been approved. 3,625 stage 2 claims have been created to date; of these 2,998 have been approved. The total estimated cost to the Exchequer to date of the incentive is some €43 million of which some €14.4m relates to retrospective claims for 2016.
The Deputy may also wish to know that Revenue regularly publishes statistics on the Help-to-Buy incentive (including the estimated cost of the incentive) at http://www.revenue.ie/en/about/statistics/htb-incentive-stats.html.