Tuesday, 16 June 2020
Department of Finance
69. To ask the Minister for Finance if he will review the help-to-buy scheme and examine the need to include second-hand properties in need of repairs; and if he will make a statement on the matter. [10727/20]
70. To ask the Minister for Finance his plans to extend to first-time buyers the incentives and assistance to persons seeking to purchase a home that is not a new build; and if he will make a statement on the matter. [10763/20]
I propose to take Questions Nos. 69 and 70 together.
Section 477C of the Taxes Consolidation Act of 1997 provides for The Help to Buy scheme (HTB). HTB was initially announced on 19 July 2016 as part of the ‘Rebuilding Ireland: Action Plan for Housing and Homelessness’ and was due to terminate on 31 December 2019. However, in Finance Act 2019, I provided for an extension of the scheme, in its present form, for a further two-year period up to 31 December 2021. This extension aligns with the timeline envisaged for building more homes in Rebuilding Ireland.
HTB has been the subject of two independent reviews: an impact assessment (2017), and a full Cost Benefit Analysis (2018), both carried out by Indecon Economic Consultants.
The report of the impact assessment was published as part of Budget 2018 documents and is available at the following link:
The report of the Cost Benefit Analysis was published on the day of Budget 2019, in the Department of Finance Report on Tax Expenditures, and is available at the following link:
An increase in the supply of new housing is fundamental to resolving the current housing crisis. One of the main aims of the policy underpinning the design of HTB was to help encourage the building of additional new properties. By restricting the scheme solely to new dwellings and new self-builds, it is anticipated that the resulting increase in demand for affordable new build homes will encourage the construction of an additional supply of such properties.
If the scheme were also available for second hand properties, such an extension would have little or no effect on the provision of additional supply, and would consist primarily of ‘economic deadweight’ in terms of incentive effect.
Finally, it should be noted that taxation is only one of the policy levers available to the Government through which to boost housing supply. Ireland’s past experience with tax incentives in the housing sector strongly suggests the need for a cautionary stance when considering intervention. Given these considerations, there are no plans at the present moment to extend the Help to Buy scheme to second hand properties.