Tuesday, 27 July 2021

Questions (385, 393, 407)

Niamh Smyth

Question:

385. Deputy Niamh Smyth asked the Minister for Finance if the help to buy scheme will continue into 2022 (details supplied); and if he will make a statement on the matter. [40282/21]

View answer

Brendan Griffin

Question:

393. Deputy Brendan Griffin asked the Minister for Finance if he will extend the help to buy scheme and expand it to include currently uninhabitable properties or properties vacant for over two years for first-time buyers; and if he will make a statement on the matter. [40411/21]

View answer

Jennifer Whitmore

Question:

407. Deputy Jennifer Whitmore asked the Minister for Finance if the help to buy scheme will continue into 2022; and if he will make a statement on the matter. [40771/21]

View answer

Written answers (Question to Finance)

I propose to take Questions Nos. 385, 393 and 407 together.

The Help to Buy (HTB) incentive is a scheme to assist first-time purchasers with obtaining the deposit they need to buy or build a new house or apartment. The scheme gives a refund on Income Tax and Deposit Interest Retention Tax (DIRT) paid in the State over the previous four years, subject to limits outlined in the legislation.

An increase in the supply of new housing is fundamental to resolving the current housing crisis. One of the main aims of the policy underpinning the design of HTB was to help encourage the building of additional new properties. By restricting the scheme solely to new dwellings and new self-builds, it is anticipated that the resulting increase in demand for new build homes will encourage the construction of an additional supply of such properties.

For a property to qualify for HTB it must be new, or, converted for use as a home not having been previously been used as a home. In the circumstances where the house was previously used as a dwelling but knocked down and rebuilt, then it is “new”. First-time buyers may purchase a site containing a house which is derelict and which they plan to demolish, in whole or in part, with the intention of building a new house. First time buyers intending to undertake such purchases should contact Revenue via MyEnquiries outlining the specific circumstances of their case and Revenue will consider them on a case by case basis.

Revenue advise me that in order for it to make an assessment that the dwelling being built on the site is ‘new’, sufficient evidence is required which shows that the previous dwelling was demolished and replaced as opposed to being extended/refurbished. Revenue also require as much evidence as possible from the builder, engineer or other professionals working on the project, about the condition of the former dwelling which made it uninhabitable or unsound and required that it was demolished (and the extent of demolition involved). If there is any other information (photos, etc.) that’s relevant in helping Revenue understand that the property meets the criteria in the legislation, this should be included.

In relation to second-hand properties more generally, an increase in the supply of new housing remains a priority aim of Government policy. As mentioned above, the HTB scheme is specifically designed to encourage an increase in demand for new build homes in order to encourage the construction of an additional supply of such properties. A move to include second-hand properties within the scope of the relief would not improve the effectiveness of the relief; on the contrary, it could serve to dilute the incentive effect of the measure in terms of encouraging additional supply.

In the normal course of events, the future of the scheme, beyond its current sunset date of 31 December 2021, is a matter that would fall to be considered by Government in the context of Budget 2022 and the subsequent Finance Bill.