Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

The Deputies will be aware that the help-to-buy initiative has been in operation since January 2017. It is designed to assist first-time buyers with obtaining the deposit required to purchase or build their first homes. With a view towards increasing the supply of new housing, the relief is only available in respect of new build or self-build properties. Following its introduction in budget 2017, Indecon International Economic Consultants was commissioned to undertake an independent assessment of the measure, which included examining whether the policy objectives on the supply of new homes were being met, as well as the impact, if any, it was having on house prices and the residential property market generally.

The Indecon review found that the scheme is meeting its objective of assisting first-time buyers of new homes to fund the deposit required under the Central Bank's macro-prudential rules, and that the scheme has not had a measurable effect on house prices to date. Furthermore, it indicated that:

Indecon’s assessment of the HTB is that there was a valid market failure argument for the HTB introduction. We also believe that the HTB, as a tax refund incentive, was likely to be as efficient as a direct expenditure intervention.

On the basis of the Indecon findings, and considering that help-to-buy has only been in operation for less than a year, I decided to allow the measure to continue in its current form for the coming year.

In continuing to monitor the scheme, my officials may draw upon a range of statistical sources, including data on construction activity and house prices from the Department of Housing, Planning and Local Government as well as data from the CSO, such as the residential property price index and elements from the quarterly national household survey. In addition, the Revenue Commissioners publish monthly statistical reports on the cost of help-to-buy. Its report includes the numbers of claims made, approved and paid, as well as breakdowns of the figures by metrics such as property value, loan-to-value ratio and property type. It also includes a geographical breakdown of claims by county.

As regards the amendment proposed by Deputy McGrath, I note the Indecon recommendation that a comprehensive cost-benefit analysis should be carried out “after a period". I think we can all agree that the measure has only been in operation for a limited period and there is, as yet, insufficient data for a meaningful ex postcost-benefit analysis. The period referred to in the Indecon report needs to be considered in the context that there is already a sunset clause in place for the help-to-buy scheme. Absent an amendment to the Taxes Consolidation Act in either Finance Bill for 2018 or 2019, the incentive will cease on 31 December 2019.

For this reason and the fact that we have only just received a detailed report from Indecon, I cannot accept the amendment put forward by Deputy McGrath. Also, having regard to the information I have just presented to the House on the approach to keeping the measure under close review, I do not propose to accept the amendment put forward by Deputy Boyd Barrett and colleagues.

There was a parliamentary question for the Minister for Finance in the last round. What people have said here is incorrect. The data that were presented by the Revenue Commissioners on the number of cases, the value of the property and the loan-to-value ratio showed that the vast majority of claims on the help-to-buy initiative were from those who were targeted.

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