Dáil Éireann Debate, Tuesday - 23 October 2018
226. Deputy Michael McGrath asked the Minister for Finance when he plans to make and announce a decision on the future of the help-to-buy scheme; if he has received or is expecting to receive a cost-benefit analysis or other report on the scheme; and if he will make a statement on the matter. [43852/18]
View answerSection 477C of the Taxes Consolidation Act 1997 (Help-to-Buy Incentive) includes a sunset clause for the incentive, coming into effect on 31 December 2019. Any decisions regarding the future of Help to Buy will be made next year in the context of Budget 2020.
As the Deputy may be aware, earlier this year I commissioned an independent Cost benefit Analysis (CBA) of the Help to Buy incentive. Following a competitive tender process, Indecon International Economic Consultants were appointed to carry out this analysis. The report of the CBA was published on the day of Budget 2019, in the Department of Finance Report on Tax Expenditures, and is available at the following link:
www.budget.gov.ie/Budgets/2019/Documents/Tax%20Expenditures%20Report%20Budget%202019.pdf.
The main findings of the CBA were as follows:
- Prices: While there may have been a very small increase in prices attributable to the introduction of the HTB incentive, the primary driver of house prices remains the continued misalignment between demand and supply.
- Supply: The evidence suggests that following the introduction of the Help to Buy incentive there was an increase in supply which can be attributed, in part, to HTB.
- Affordability: The analysis also finds that the availability of HTB has reduced the time to needed to save for a deposit and improved the overall affordability of housing for HTB claimants.
- Benefit/Cost Ratio: The analysis finds a benefit-cost ratio of 1.28. indicating a moderate positive effect for the incentive. However, the study also notes that if the price of new HTB units was to increase due to the incentive, the net benefit would be reduced.
