NEARLY 5,000 FIRST-TIME buyers have taken up the government relief scheme, with 538 claiming the maximum amount of €20,000.
The most recent figures from Revenue show that around €62 million has been paid to developers under the scheme.
The scheme, which was announced in last year’s Budget, entitles those buying new-build or self-build homes valued up to €600,000 to claim a tax rebate of up to 5% of the value of the home up to €20,000.
The scheme is slated to cost the Exchequer around €50 million a year. The €62 million figure includes retrospective payments from last year.
Up to the end of November, 4,941 applications had been approved.
The figures also show that more than double that number – 11,985 – applications are either approved but not processed or pending.
Applications are made through Revenue by registering on their website and going through an application process. The rebate can be claimed on either DIRT or income tax and the relief available is calculated on tax paid in the preceding four years.
When a claim is submitted, the information provided must be verified by the qualifying contractor or the solicitor acting on behalf of the self-builder.
Commitment
There had been speculation that the government would scrap the scheme in this year’s Budget, but it has been retained despite criticism.
In response to a query by Fianna Fáil’s Michael McGrath during questioning by the Finance Committee in April, Central Bank Governor Philip Lane said that the impact of the help-to-buy scheme was ‘of course’ to drive up house prices.
“I don’t think there can be any doubt that if you have additional capacity that the effect will of course be rising house prices.”
He went on to say that this could be just a short-term effect, and that the long-term effect of new houses and an increase in supply could ‘self-correct’ the market.
But he questioned whether the €20,000 grant to first-time buyers for buying new builds was the best way to fix the housing crisis.
“If you’re offering 20k rebate, is that the best use of that funding? But that’s for the Oireachtas to [decide].”
Sinn Féin Finance and Public Expenditure and Reform Spokesperson Pearse Doherty has called the scheme a wealth transfer to developers.
“The Help to Buy Scheme has been nothing more than a transfer of taxpayer’s money into the pockets of developers. Sinn Fein’s warnings about the scheme were ignored by Fine Gael and Fianna Fail and as result approximately €50m of taxpayer’s money has been thrown into a black hole with no results.
“Even the idea that a two-year scheme could boost builds makes no sense when you consider the build time. This was a bad idea from day one and needs to be stopped immediately.”
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