Wednesday 26 July 2017

Cosgrave says €20,000 grant needed in Budget for first-time buyers

Michael Cosgrave said he believed the provision of grants for first-time buyers coupled with tax relief on mortgage repayments would be sufficient measures (Stock image)
Michael Cosgrave said he believed the provision of grants for first-time buyers coupled with tax relief on mortgage repayments would be sufficient measures (Stock image)
Ronald Quinlan

Ronald Quinlan

Developer Michael Cosgrave has said the Government needs to introduce a grant for first-time home buyers of up to €20,000, as opposed to the €10,000 which is being mooted in the lead-up to the Budget.

Cosgrave, who along with brothers Joe and Peter runs the hugely successful Cosgrave Property Group, said the proposed grant needs to be aligned to today's property values and as such "would need to be closer to €20,000 to get it right".

Comparing today's housing market to the 1980s he said: "You need a mixed market; you need to have first-time buyers.

"In the 1980s, someone would get £2,500 (of a grant) and the house would have been £50,000.

"Today, those houses are worth €500,000, so it's a pension plan."

Asked if the Central Bank's mortgage lending rules should be relaxed, Cosgrave said he believed the provision of grants for first-time buyers coupled with tax relief on mortgage repayments would be sufficient measures.

He said: "If you get a grant and tax relief, those [mortgage lending] rules can still be applied. If you get tax relief, it makes buying your home more affordable. People in the 1980s on the average wage, your civil servant and your fireman, were able to buy a house in Dublin. They can't do that now. In the 1980s, we built houses for £50,000 and the first-time buyer got a grant of £2,500."

Cosgrave also called for tax relief to be provided for smaller buy-to-let investors.

He said: "In the rental sector, it's great to have the involvement of investment funds, but you also need to have balance for the single investor. There are places down the country where there are only single houses as opposed to big apartment blocks.

"Not everyone can bid for apartment blocks in the city. There has to be room for the single investor and they should be afforded the same reliefs on taxation as anyone in business if it is to be fair."

Asked to respond to the suggestion made by some commentators that developers were 'hoarding' land, Cosgrave said: "Some of the funds have bought land, but they haven't come in to build. They came to invest and that's their prerogative.

"There isn't a huge amount of land being hoarded. The whole planning process is very complicated."

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