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Tax Code

Dáil Éireann Debate, Tuesday - 28 June 2022

Tuesday, 28 June 2022

Ceisteanna (210, 211)

Brendan Griffin

Ceist:

210. Deputy Brendan Griffin asked the Minister for Finance his advice on a matter (details supplied) regarding the help-to-buy scheme; and if he will make a statement on the matter. [34209/22]

Amharc ar fhreagra

Willie O'Dea

Ceist:

211. Deputy Willie O'Dea asked the Minister for Finance if he has plans to allow the help-to-buy scheme to be used for the purchase of second-hand homes; and if he will make a statement on the matter. [34279/22]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 210 and 211 together.

The Help to Buy 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 Taxes Consolidation Act 1997 outlines the definitions and conditions that apply to the scheme.

An increase in the supply of new housing remains a priority aim of Government policy. For this reason, HTB is specifically designed to encourage an increase in demand for new build homes in order to support 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 dwelling, having not been previously been used as a dwelling.

A move to include other properties previously used as a residential home/second-hand properties within the scope of the scheme itself 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. Extending the HTB scheme in this way would provide no incentive effect to encourage the building of new homes and would be likely to have a significant deadweight element and a high Exchequer cost. For these reasons, I currently have no plans to extend the HTB scheme to include such properties.

In considering tax expenditures, I must always be mindful of the public finances and the many demands on the Exchequer. Owing to this, proposals for such measures are assessed in accordance with 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 and where a tax-based incentive is more efficient than a direct expenditure intervention.

As the Deputies will be aware, work by external consultants on the review of HTB is currently under way. The outcome of this review will help inform decisions on the future of the scheme beyond its current sunset date of 31 December 2022. However, that is a matter that will fall to be considered by Government in the context of the Budget 2023 process and it would not be appropriate for me to offer further comment on the matter at this time.

Question No. 211 answered with Question No. 210.
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