James Lawless
Ceist:21. Deputy James Lawless asked the Minister for Finance if he will address an issue with the first-time buyers scheme (details supplied); and if he will make a statement on the matter. [34709/22]
Amharc ar fhreagraWednesday, 29 June 2022
Ceisteanna (21, 22)
Michael Healy-Rae
Ceist:22. Deputy Michael Healy-Rae asked the Minister for Finance if he plans to include second houses in the help-to-buy scheme to allow persons to get on the property ladder, given that new houses are not easy to buy at present. [34846/22]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 21 and 22 together.
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 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 respect of the maximum purchase value for a qualifying property to be eligible for HTB, the most recently available data from the Central Statistics Office, relating to April 2022, indicate that the average sale price in the case of first time buyer owner occupiers nationally is €372,900 and for Dublin the equivalent figure is €472,100. Also, when we look at the breakdown of HTB claims by house price set out in Revenue's annual statistical report on the scheme for 2021, it sets out that some 76% of successful HTB claims in 2021 were for properties below €375,000 in value. While not necessarily conclusive in terms of providing a guide as to the maximum purchase price that should apply under the scheme, these figures offer a perspective on the current maximum of €500,000.
As the Deputies may be aware, work by external consultants on the review of HTB is currently underway and, in fact, is nearing completion. The outcome of this review will help to inform decisions on the future of the scheme beyond its current sunset date of 31 December 2022. However, this 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 at this time.
Question No. 22 answered with Question No. 21.