Thursday, 16 December 2021
Department of Finance
245. To ask the Minister for Finance when an announcement will be made in relation to if he will extend the help-to-buy scheme and expand it to include currently uninhabitable properties that buyers do not plan to fully demolish as part of the renovation works; and if he will make a statement on the matter. [62909/21]
The Help to Buy (HTB) incentive, is a scheme to assist first-time purchasers with the deposit they need to buy or build a new house or apartment. The incentive gives a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous four years, subject to limits outlined in the legislation. Section 477C Taxes Consolidation Act (TCA) 1997 outlines the definitions and conditions that apply to the HTB scheme. HTB is specifically designed to encourage an increase in demand for new build homes in order to encourage the construction of an additional supply of such properties.
In my Budget 2022 address, I announced an extension of HTB for a further year until the end of 2022 and also that a formal review of the scheme would take place in 2022. The intention is that the review will be fundamental in nature, and that it will inform decisions for Budget 2023 and Finance Bill 2022.
With regard to currently uninhabitable or derelict properties which are not to be demolished, the recent Tax Strategy Group (TSG) paper on HTB, published on Budget day and available on my Department's website, noted that there would be difficulties in defining these properties in legislation to remove the potential for abuse. Revenue has advised that, as matters stand, in some marginal cases involving this issue for both HTB and Local Property Tax, a higher degree of compliance oversight, requiring engineers’ reports, photos and other supporting documentation, by them is necessary.
Furthermore, the paper notes that the extension of HTB as such a measure could create a market for eligible properties that would result in the benefit accruing to vendors of such properties in the form of increased prices rather than assisting purchasers.
In relation to second-hand properties more generally, an increase in the supply of new housing remains a priority aim of Government policy. As mentioned above, the HTB scheme is specifically designed to encourage an increase in demand for new build homes in order to encourage the construction of an additional supply of such properties. A move to include second-hand properties within the scope of the relief would not improve the effectiveness of the relief; on the contrary, it could serve to dilute the incentive effect of the measure in terms of encouraging additional supply.