Tuesday, 21 June 2022
Department of Finance
157. To ask the Minister for Finance if he plans to amend the tax requirement in the upcoming Budget in terms of qualifying for the first-time buyers grant given the drive that is ongoing to recruit workers from abroad and to get many of the Irish diaspora to return to take up employment here (details supplied); and if he will make a statement on the matter. [32519/22]
I believe that the Deputy is referring to the Help-to-Buy (HTB) incentive, an income tax relief designed to assist first-time buyers with obtaining the deposit required to purchase or build their first home. With a view towards increasing the supply of new housing, the relief is only available for ‘new builds’. Broadly, the relief takes the form of a rebate of income tax, including DIRT, paid over the previous four tax years. However, it is open to claimants to select all or any of the previous four tax years for the purposes of calculating the refund available to them.
As the Deputy may be aware, in 2018, the Minister for Foreign Affairs and Trade commissioned a report to examine the challenges facing returning Irish emigrants. The Indecon Economic Report on Addressing Challenges Faced by Returning Irish Emigrants was published by the Department of Foreign Affairs and Trade and is available at the following link: www.dfa.ie/media/dfa-2017/globalirish/Report-on-Returning-Emigrants-2018.pdf.
The findings of the report are of relevance to the general issue raised by the Deputy as it provided insights on emigrants’ views of the barriers faced by them in returning to Ireland. In short, the report identified that a wide range of issues could be addressed with a view to attracting Irish people, born and educated in Ireland, to return from abroad.
The consultants identified exclusions from the HTB incentive if they left Ireland more than four years previously as a particular tax treatment issue. Indecon recommended a tax refund based on the last four years in which tax was paid in Ireland, with eligibility restricted to those who paid tax in last 14/15 years.
However, upon further examination, my Department considered that the measure could not be recommended for implementation due to wider knock-on implications for the operation of the scheme. As such, currently I do not have any plans to seek to amend the eligibility requirements for first-time purchasers for the purposes of the HTB incentive to be fully tax-compliant and also have submitted the appropriate tax return for each tax year relevant to the claim. Also of relevance in this regard is that a formal review of the HTB scheme is currently underway and is expected to be completed shortly. The intention is that the exercise will help inform decisions for Budget 2023 and Finance Bill 2022, having regard to the sound management of the public finances.
Finally, the Deputy will also wish to be aware that the Minister of State for Overseas Development Aid and Diaspora chairs an ‘Interdepartmental Committee on the Irish Abroad’. This committee brings together all relevant Government Departments and agencies with a view to developing an all of government approach to addressing the barriers which the Diaspora face in returning to Ireland. The Department of Finance continues to be engaged in this process.