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Housing Schemes

Dáil Éireann Debate, Tuesday - 22 March 2022

Tuesday, 22 March 2022

Questions (271)

Seán Haughey

Question:

271. Deputy Seán Haughey asked the Minister for Finance if he will amend the help-to-buy scheme in order that potential homeowners can avail of it to purchase second-hand homes; and if he will make a statement on the matter. [14972/22]

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Written answers

The Help to Buy (HTB) incentive is a scheme to assist first-time purchasers with the deposit they need to buy or build a new house or apartment. The incentive 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. Section 477C Taxes Consolidation Act (TCA) 1997 outlines the definitions and conditions that apply to the HTB scheme.

An increase in the supply of new housing is fundamental to resolving the current housing crisis.  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 amend the scheme to include second-hand properties would not achieve this aim; on the contrary, it could serve to dilute the incentive effect required in terms of encouraging additional supply of new properties.

In passing, I might note that the number of housing commencements for 2021 at over 30,700, and up from 21,686 in 2020, is encouraging. As the Deputies may be aware, the Housing for All Strategy has as a  target the construction of an average of at least 33,000 new homes per year out to 2030.

As the Deputy will appreciate, decisions regarding taxation measures are usually made in the context of the annual Budget and Finance Bill process. Such decisions must have regard to the sound management of the public finances and my Department's Tax Expenditure Guidelines. The guidelines make clear that any policy proposal which involves tax expenditures should only occur in limited circumstances where there are demonstrable market failures, where a tax-based incentive is more efficient than a direct expenditure intervention.

Finally, I announced in my Budget 2022 address that a formal review of the scheme will take place in 2022. The review will be fundamental in nature and will inform decisions for Budget 2023 and Finance Bill 2022. My Department has recently put the review exercise out to tender.

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