Róisín Shortall (Dublin North West, Social Democrats)
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145. To ask the Minister for Finance the supports available for second time buyers who wish to downsize to a smaller more affordable home; if there are restrictions in place under Central Bank rules for second time buyers who wish to downsize; and if he will make a statement on the matter. [17615/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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Upon selling their primary residence, the vast majority of owner-occupiers are entitled to the full Principal Private Residence Relief to Capital Gains Tax (CGT), provided they meet the conditions of the relief. The relief allows owner-occupiers to retain the proceeds made from liquidating the equity in their home, without being liable to CGT. Downsizers can use the proceeds from the sale of this property to purchase more appropriate accommodation.

Downsizers are ‘Second and Subsequent Buyers’ (SSBs) under the Central Bank’s macro-prudential mortgage measures. As such, the same rules that apply to all SSBs also apply to downsizers. Specifically, a generalised Loan-to-Value (LTV) ratio of 80 per cent and Loan-to-Income (LTI) of 3.5 times income is applicable.

In the case of downsizers, the required equity stake for access to an SSB mortgage is likely to be significantly more attainable than would be the case for First Time Buyers (FTBs), or other purchasers. The new accommodation is likely to be purchased at a price below the sales price of the existing dwelling, obviating the need for significant savings as would be the case with FTBs.

The most effective way to support downsizers is to increase the supply of housing and, in particular, smaller units such as apartments. In that respect, recent indicators are very positive. The number of apartment completions doubled between 2016 and 2018, from 1,169 to 2,372. Similarly, planning permissions granted for apartments increased by 137 per cent over the same period and accounted for 46 per cent of all planning permissions in 2018.

I will continue to work with my colleague, the Minister for Housing, Planning and Local Government to support increased supply of all types of housing.