Damien English (Meath West, Fine Gael) | Oireachtas source

I am here to represent the Minister for Finance, who sends his apologies as he cannot be present. The second issue raised by the Senator is one that was raised in the House last week and it is under constant review. I made it clear to the Senator's colleague that we will take on board suggestions. However, with regard to schemes that have a low drawdown, we cannot force people to take part in a scheme. They are choosing the other scheme as they judge it has better conditions, which has resulted in the respective figures being 1,200 versus 21.The reason for that is that product suits them better but I made it clear if the Senator has ways to make it better, we will take on board all suggestions. There was a lack of suggestions in last week's debate. We are open to suggestions and the Minister and I are keeping everything under review because we want to make mortgages available to people who want to buy homes, where appropriate. Local authority mortgages are only available if applicants have been refused credit by two lending institutions. We will take on board all suggestions.

With regard to the issue raised, the macroprudential rules are set by the Central Bank of Ireland, which is independent of the Government. The Minister trusts that the Senator and her party have brought their concerns regarding the classification of the cohort of buyers that she referenced to the attention of the Central Bank as part of its review of the macroprudential residential mortgage lending measures.

A key priority for the Government is the development of a fully functioning housing market that responds adequately to the needs of our citizens. To this end, Rebuilding Ireland - An Action Plan for Housing and Homelessness, was launched on 19 July last by the Minister for Housing, Planning, Community and Local Government. He has primary responsibility for the delivery of this action plan with cross-departmental support, including from the Departments of Finance, Health, and Social Protection. As a complement to the structural actions contained in the action plan, a commitment to introduce a new tax-based help-to-buy incentive was also announced, with the full details of the incentive to be provided on budget day.

The Government is conscious that there is a supply shortage of housing and of the challenges individuals face in meeting the macroprudential rules for residential mortgage lending. It is against this background that the Minister for Finance has asked his officials to design the new incentive. One important consideration that was taken into account was that the incentive could not be designed to circumvent the requirements of the macroprudential rules but to assist home buyers in meeting the deposit aspect of those rules. In this regard, the Senator will be cognisant of the supports that have been provided by successive Governments in recognition of the difficulties faced, in particular, by first-time buyers. These have taken the form of grants and additional mortgage interest relief for such purchasers.

Subject to the approval of the Oireachtas, eligibility for the new incentive will be backdated to take effect from 19 July 2016. This was the date of the publication of the action plan and the Government did not wish to cause any interruption in the housing market as a result of potential purchasers deciding to defer purchases, pending the commencement of the incentive. The Minister for Finance will outline the full details of the incentive, including eligibility criteria and implementation method on budget day next week. He is sympathetic to the situation of those who have had to surrender their homes on foot of a court order. However, there are many potential scenarios in which such orders have been or will be made and it would be difficult to treat all of those scenarios in the same manner. Some individuals may have access to a residual equity amount following such orders. Furthermore, those who have divorced, may have had access to grants or increased mortgage interest relief by virtue of previous classification as a first-time buyer. It would again be the case that such individuals may have sold a family home, with the proceeds being split between the parties.

There are many individuals who face the difficult task of saving the increased deposit required by the Central Bank macroprudential rules for non-first-time buyers. However, this rule takes account of existing equity that can be available to such buyers. The Minister has concerns that providing additional access to relief for special cases would lead to additional lobbying across the board. Responding legislatively to difficult cases does not, in general, make good tax law or practice. Furthermore, he is of the view that it would be inequitable to treat one class of non-first-time buyers more beneficially than another class, particularly when such individuals may have already received additional supports from the State when they first bought homes. I hope this brings clarity to the issue for the Senator