Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The help-to-buy incentive aims both to assist those first-time buyers struggling to save for the deposit required to purchase a house, and incentivise additional building and the provision of extra housing stock. At budget time, my officials estimated that the help-to-buy incentive would cost €40 million per annum but €50 million in 2017 due to the backdating of the relief in respect of properties which became eligible for the scheme since 19 July 2016.

To avail of the incentive involves two stages. Stage 1 is the application stage, wherein prospective applicants can query whether they qualify for the incentive. They can also get clarity on the maximum amount of rebate they could potentially benefit from, based on their tax paid in a four-year period. Stage 2 is the claims stage, wherein applicants who decide to proceed with purchasing or building a qualifying property must provide documentary evidence of the relevant property transaction or their mortgage drawdown.

The estimates for the potential cost of the incentive that have featured in recent media reports are based on the number of applications received by Revenue to stage 1 of the scheme, rather than the number of claims to date. However, many of these applicants may never make a claim to stage 2 for a variety of reasons. These could include individuals who do not go on to obtain mortgage approval, who may decide to purchase a second-hand property, or who are not able to source the new home that they desire.

As of 31 March 2017, Revenue had received 4,698 applications to stage 1 of the help-to-buy incentive. Of these, 1,006 stage 2 claims have been created to date. A total of 534 of these have been approved, at an estimated cost to the Exchequer to date in the order of €8.2 million of the €50 million allocated for the cost of the incentive in 2017.

With regard to the Deputy's query concerning cost containment measures, the help-to-buy incentive is by its nature a demand-led scheme. Therefore, artificially restricting its potential uptake in such a manner would be detrimental to its policy aims and would be unfair to those potential applicants who could lose out as a result. In addition, should the cost of the incentive exceed the original estimate, it could be indicative of an increase in the supply of new homes, which is exactly what I intended to encourage through its introduction.

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