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Help-To-Buy Scheme Eligibility

Dáil Éireann Debate, Thursday - 21 November 2019

Thursday, 21 November 2019

Questions (59)

Michael McGrath

Question:

59. Deputy Michael McGrath asked the Minister for Finance his views on whether separated and divorced persons that previously owned a share in a property should be treated as first-time buyers in terms of the tax code and mortgage rules when buying a home at some point in the future; and if he will make a statement on the matter. [48395/19]

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Written answers

As the Deputy will be aware, Finance Bill 2019 proposes a two-year extension to the Help to Buy (HTB) scheme. The definition of first time buyer in HTB is as follows:

'first-time purchaser' means an individual who, at the time of a claim under subsection (3) has not, either individually or jointly with any other person, previously purchased or previously built, directly or indirectly, on his or her own behalf a dwelling;

The intention is to target the Help to Buy scheme on those who have not had the opportunity to build up equity in another property which could be used to purchase the second or subsequent property.

The definition complements that in the Central Bank's macro-prudential rules. It should be noted that the Bank is independent in the formulation of this policy.

I do not propose amending the definition of first time buyer in HTB.

The Central Bank has advised me that it defines a first time buyer as a borrower to whom no housing loan has ever before been advanced. (Also where the borrower under a housing loan is more than one person and one or more of those persons has previously been advanced a housing loan, none of those persons is a first-time buyer for the purposes of the lending rules). However, the Central Bank also advises me that it introduced proportionate limits in it mortgage lending framework specifically to allow flexibility by lenders when assessing individual cases, such as may be the case for separated or divorced persons. The Bank's view is that the proportionate limits mean that lenders are able to make decisions based on an individual borrower’s circumstances up to a specific overall limit. Nevertheless, lenders will still be required to assess an individual borrower’s affordability and lend prudently on a case by case basis, in line with the requirements of the Central Bank’s Consumer Protection Code and other relevant regulations.

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