Thursday, 14 February 2019
Department of Finance
As the Deputy may be aware, section 477C of the Taxes Consolidation Act 1997 provides that the Help to Buy incentive (HTB) will expire on 31 December 2019.
As of 31 January 2019, Revenue received 23,517 applications for HTB and 10,618 claims had been made, of which 10,107 had been approved. The total estimated cost to the Exchequer of these verified claims is €147 million, of which €18.2 million represents retrospective claims (home purchases and self-builds in the period 19 July to 31 December 2016.
HTB has been subject to two formal reviews since its introduction, both carried out by Indecon Economic Consultants. The most recent of these, published in October 2018, concluded as follows:
- Prices: While there may have been a very small increase in prices attributable to the introduction of the incentive, the primary driver of house prices remains the continued misalignment between demand and supply.
- Supply: The evidence suggests that following the introduction of the incentive there was a marked increase in supply which can be attributed in part to HTB.
- Affordability: The analysis also finds that availability of HTB has reduced the time to save for all claimants and improved the overall affordability of housing for these individuals.
- Benefit/Cost Ratio:The analysis finds a benefit-cost ratio of 1.28 indicating a moderate positive effect for the incentive but note that if the price of new HTB units was to increase due to the incentive, the net benefit would be reduced.
As would be normal, the role of the incentive will be examined in the context of the forthcoming Budget and Finance Bill process. It would be premature at this point to anticipate the outcome of that examination.