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

As the Deputy will be aware, during the Committee Stage debate on the Finance Bill 2016, I agreed to commission an independent impact assessment on the effects of the help-to-buy incentive for completion prior to budget 2018. Following a competitive tender process, Indecon Economic Consultants were appointed in April to undertake this impact assessment.

This purpose of this project, in general, is to assess whether the policy objectives on the supply of new homes are being met, what impact, if any, the scheme is having on new and second-hand house prices, and what impact the scheme is having on the residential property market generally. It is expected that the assessment will be completed and submitted to me by the end of August.

In response to the Deputy's queries concerning the uptake and cost of the incentive, there are two stages involved in the help-to-buy process. 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 that decide to proceed with purchasing or building a qualifying property must provide documentary evidence of the relevant property transaction or their mortgage drawdown.

As of Thursday, 11 May 2017, Revenue had received 6,084 applications to stage 1 of the help-to-buy incentive, of which 3,621 have been approved. However, it is possible that 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.

To date, 1,677 stage 2 claims have been made, of which, 1,154 have been approved, at a total estimated cost to the Exchequer of just over €17 million. This cost covers almost 70% of the stage 2 claims made to date.  Using this as a base, it could be estimated that a further €5 million remains outstanding in respect of these claims. This would bring the cost to just over €22 million, which relates to the scheme being available in respect of relevant homes over an 11-month period. Given that just over seven months remain in 2017, my officials estimate that the cost of the incentive this year will largely be in line with the original estimate of €50 million.

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