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

Senators 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 deposits 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 Economic Consultants were 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 it was having on house prices and the residential property market generally. The Indecon review found that the help-to-buy initiative is meeting its objective of assisting first-time buyers of new homes to fund the deposits 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 asefficient 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, the Minister decided to allow the measure to continue in its current form for the coming year.

As was mentioned during the Report Stage debate on this Bill in the Dáil, in continuing to monitor the scheme, 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. Their 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 current recommendation, on at Report Stage in the Dáil, the Minister agreed, on foot of amendments proposed by Deputies Boyd Barrett and Michael McGrath, that a cost-benefit analysis of the incentive will be carried out and concluded ahead of budget 2019 next year. Given the availability and timeliness of data on the progress of the incentive, the recent Indecon report and now the commitment to undertake a formal cost-benefit analysis on the scheme before the next budget, I believe that the recommendation before us is not warranted.

In response to Senator Conway-Walsh, I want to put on the record of the House that, according to the most recent figures we have from Revenue, in terms of over 83% of people who have purchased property under the scheme to date, the property has cost €375,000 or under so that puts it into context that the people using this scheme are buying modest houses. There was a concern that this would be made available for houses over €450,000. Deputy Boyd Barrett, a known supporter of the policies of the left, made it very clear that €450,000 would not buy someone very much in his constituency. We are satisfied, therefore, that those who are using this are first-time buyers who are purchasing modest new houses.