Aodhán Ó Ríordáin (Dublin Bay North, Labour)
Link to this: Individually | In context | Oireachtas source

58. To ask the Minister for Finance the reason for extending the help to buy scheme; when the changes were applied; if consideration was given to backdating the stimulus scheme from March 2020 when the Covid-19 lockdown occurred; and if he will make a statement on the matter. [25917/20]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Help to Buy incentive (HTB) is a scheme to assist first-time purchasers with a deposit they need to buy or build a new house or apartment. The incentive gives a refund on Income Tax and Deposit Interest Retention Tax (DIRT) paid in the State over the previous four years, subject to limits outlined in the legislation.

This measure is designed to stimulate supply of new houses in the housing market and to assist first time buyers in accumulating a deposit for a new home. In order to further meet these goals, I announced a temporary enhancement to the existing HTB scheme for the remainder of 2020 as part of the July Stimulus package. The legislation to give effect to this is et out in the Financial Provisions (Covid-19) (No.2) Act 2020 .

In summary, the legislation provides that where applicants:

(I) enter into a contract for the purchase of a new house or apartment, or

(ii) make the first draw down of the mortgage in the case of a self-build property,

during the period from 23 July 2020 to 31 December 2020, they will be eligible for increased relief under the HTB scheme to the lesser of:

- €30,000 (increased from €20,000),

- 10 per cent (increased from 5 per cent) of either the purchase price of the new home or, in the case of self builds, the completion value of the property, or,

- the amount of Income Tax and DIRT paid in the four years prior to making the application.

All other conditions of the original HTB scheme remains the same.

The enhanced level of support under the scheme, which was announced as part of the July Stimulus Package, applies to applicants who, on or after 23 July 2020 (and up to 31 December 2020), enter into a contract for the purchase of a new house or who make the first draw down of the mortgage in the case of a self-build.

In relation to the Deputy's question as to whether consideration was given to back-dating the scheme to include all HTB applicants since March last; the position is that the Government decided, and the Oireachtas endorsed in passing the Financial Provisions (Covid-19) (No.2) Act 2020, that the threshold date for eligibility for the enhanced level of support was 23 July 2020. The approach adopted, whereby the date of the announcement was the same as the effective date (for the enhanced level of support), mirrored that which applied when the HTB scheme was originally introduced on 19 July 2016. The reason for this was to avoid potential market disruption in the period between the date of the announcement of the measure and any alternative effective date for the change. It is also the case that the back-dating of the measure would not have had any incentive effect.