Fianna Fáil has said it will abstain from a vote on the new help-to-buy scheme which would offer a €20,000 tax rebate to first time buyers on newly- built homes.
The party is calling for changes to the scheme, under which first-time buyers can get a maximum of €20,000 (or 5% of a maximum house price of €400,000) back in tax relief that they can offset against their required deposit. To avail of the relief, the buyers will have to put down a 20% deposit.
The 5% will only apply to newly built houses (including self-built) priced up to €400,000. Buyers will still be eligible for a tax rebate on property purchases up to €600,000, but the rebate will be limited to €20,000. No rebate will be available on houses priced over €600,000
Fianna Fáil housing spokesman Barry Cowen (pictured) said: “I’m really worried about the threshold at which this has been set (at €600,000). I think somebody considering buying a home at €590,000 doesn’t necessarily need a €20,000 top-up from the State.
“Had it been capped at €400,000, that would have set a (better) target.”
He added the scheme was unlikely to lead to an increase in housing supply, and could instead lead to an overheating of the market for first-time buyers.
“I have serious concerns that the help-to-buy scheme will merely lead to increased house prices for first-time buyers.
“The grant is restrictive in that it is limited to new builds, so now we have a situation where tens of thousands of potential first-time buyers will be chasing fewer than 10,000 new builds which are expected to be delivered next year,” he said.
There has been a spike in new-home searches on the housing website Daft.ie after the announcement in the Budget of the new first-time buyers’ help-to-buy scheme.
The website’s Martin Clancy said interest in new homes was greatest in the Dublin area and Dublin commuter counties, followed by Cork, Galway, Limerick and Waterford.
“There has been a huge spike since the announcement,” he said. “Searches have increased by 130% compared to the average daily search rate for 2016.”
This is a good guide to how targeted support for first time buyers will work. It's a temporary measure for 3 years pic.twitter.com/tivhpy2ZPc
— Simon Coveney (@simoncoveney) October 12, 2016
