Dáil Éireann Debate, Wednesday - 15 September 2021
262. Deputy Joe McHugh asked the Minister for Finance if he will consider introducing a financial incentive for first-time buyers who intend purchasing a vacant property; and if he will make a statement on the matter. [43275/21]
Amharc ar fhreagraThe Help to Buy (HTB) incentive is a scheme to assist first-time buyers with a 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.
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.
In relation to second-hand properties more generally, an increase in the supply of new housing remains a priority aim of Government policy. 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 might 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.
Proposals for new or amended tax measures are assessed in accordance with my Department's Tax Expenditure Guidelines. These make clear that it is important that any policy proposal which involves tax expenditures should only occur in limited circumstances, for example where there are demonstrable market failures. In particular, they provide that a tax-based incentive should only be considered where it would be more efficient than a direct expenditure intervention.
Finally, the introduction of such measures is a matter that would generally fall to be considered in the context of the annual Budget and Finance Bill.
