First-time buyers to benefit from 'generous' new mortgage grant
Published 18/07/2016 | 02:30
First-time buyers will get financial help from the Government in a new scheme to be announced in the Budget.
Homebuyers of new houses will benefit from a tax refund based scheme.
The measure is aimed at helping buyers currently struggling to get on the ladder due to Central Bank lending restrictions.
The new first-time buyers grant will be "very generous", according to Government figures involved in the preparation of the Budget.
Read More: Middle class 'Generation Y' feels pinch
However, it will not be similar to the British scheme which sees the State take an equity share of the house.
The Help-To-Buy scheme will involve upfront tax repayments to buyers. The precise details and the cost are still being worked out ahead of October's budget.
Finance Minister Michael Noonan is also wary about ensuring the scheme will not interfere with either the supply or demand for housing.
Mr Coveney has pointed out this means 40pc of people are locked out of the mortgage market.
The new scheme will form part of the Government's new housing action plan.
Housing Minister Simon Coveney will publish the plan later this week.
The plan is in response to the housing crisis and was promised within the first 100 days of the new Government.
One of the opening chapters of the plan is understood to be dedicated entirely to the homeless crisis, with specific details on how it is intended to tackle the crisis in the short and long term.
Among the measures contained in the plan is a new law to protect tenants when their accommodation is sold.
The move follows the case of tenants in Tyrrelstown being evicted when their complex was being sold to a vulture fund.
The high-profile case of more than 100 families in Cruise Park Drive who faced losing their homes sparked demands for greater protections for tenants.
The new so-called 'Tyrrelstown Amendment' will mean anyone selling more than 20 housing units in a complex will have to provide security of tenure to tenants and also won't be able to dramatically jack up rents.
The view within Government is most normal institutional investors are buying housing developments for a long-term return. Only investors who want to sell on and get a quick return, known as flipping, are interested in replacing the existing tenants.
The housing strategy will include a special emphasis on increasing the supply of "starter homes" for first-time buyers in Dublin.
Current prices mean no house in the Dublin area could be bought for less than €300,000.
The report will cover every aspect of the housing market, including building, buying, renting and financing, and will particularly focus on homelessness.
The Government has signalled it will make no attempt to interfere in a Central Bank review of its tough rules on deposits for homebuyers, which have been controversial.
Mr Coveney has said he has no power to tell the Central Bank what to do. Instead, the plan aims to increase supply and assist first-time buyers.
The plan will also contain a new move to speed up house-building nationwide and tackle the country's housing crisis.
A new Special Delivery Unit will be set up in the Department of Housing, with project managers appointed to drive specific house building projects from start to finish. The minister is also considering further bypassing councils by fast-tracking big building projects to An Bórd Pleanála, to speed up decisions and minimise delays through procedures and objections.
This process is similar to the strategic infrastructure projects, like roads and bridges, which go straight to the planning board for a slimmed-down assessment process.
Mr Coveney has vowed to deliver 25,000 houses per year - well ahead of the target set out in the Programme for Government.
A mix of initiatives would be deployed to boost building of starter homes. 27,000 planning permissions are currently granted in Dublin but only 4,400 of those are being used.
A special infrastructure fund will be set up to speed up projects like roads, bridges or power supplies, which may be delaying building.