Dáil Éireann Debate, Wednesday - 15 November 2023
58. Deputy Fergus O'Dowd asked the Minister for Finance to review concerns raised by a person in respect of the situation of single applicants (details supplied) and their struggles accessing the help to buy scheme; and if he will make a statement on the matter. [50217/23]
View answerThe 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 paid in the State over the previous four years, subject to limits outlined in the legislation. Section 477C of the Taxes Consolidation Act 1997 outlines the definitions and conditions that apply to the scheme.
In order to avail of the HTB incentive, the loan-to-value ratio (LTV) for a property must be 70% or more. The HTB scheme, as announced in Budget 2017, was initially intended to be limited to persons who had mortgages with a minimum LTV of 80%. However, Central Bank data indicated that a significant number of first-time buyers take out a mortgage with a LTV of less than 80%. As such, it was decided to amend the scheme in the subsequent Finance Bill to set the minimum LTV at 70% so as to ensure that first-time buyers did not feel compelled to borrow larger amounts than they would have otherwise in order to qualify for the scheme.
Individuals who are in the position of being able to avail of a mortgage at a lower loan-to-value ratio than 70% are considered to have sufficient resources to more than meet the deposit requirements of the macro-prudential rules and thus less in need of assistance from the Exchequer.
In Budget 2024 I announced a proposed amendment in Finance Bill 2023 to the Help to Buy scheme to enhance its interaction with the Local Authority Affordable Purchase Scheme (LAAP). This amendment will enable the use of the affordable dwelling contribution received through the LAAP scheme for the purposes of calculating the 70% loan-to-value requirement, thereby facilitating access to a greater number of LAAP purchasers to the HTB scheme. This change is effective from 11 October 2023 and cannot be claimed retrospectively. I also announced the extension of the scheme for a further year to 31 December 2025.
I have no further plans, at present, to change the LTV requirement.
