Thursday 30 March 2017

How Budget 2017 will affect you and your property

The 'Help to Buy' scheme aims to help new buyers onto the property ladder
The 'Help to Buy' scheme aims to help new buyers onto the property ladder

There was a huge focus on matters property-related in the Budget. Sinead Ryan summarises the top 10 changes that will have the most impact

1 The introduction of a first-time buyer's tax rebate was the biggest news. The 'Help to Buy' scheme gives 5pc a year of the purchase price back in tax over four years to a maximum of €20,000 on a house purchase of up to €600,000 and aims to help new buyers onto the property ladder. It only applies to purchases of new build homes, which are in short supply as it is. It will most help those outside Dublin, and those who are ready to buy this or next year. Other than that, it may only serve to increase prices.

2 Mortgage interest tax relief for landlords is being restored from 75pc to 80pc and the Minister promised to bring this back to 100pc in future budgets. It should never have been chopped in the first place and hopefully will help struggling landlords recover. They will be disappointed the full 100pc restoration was not made.

3 Some 47,000 'new' social housing units have been promised by 2021. It's not clear whether 'new' in this context means new builds or refurbs. Who cares, but we've heard these promised many times before. Where, by whom and when exactly, are questions still to be answered.

4 Capital Acquisitions Tax thresholds have been increased. The 'Category A' limit, which is a bequest from parent to child, will go from €280,000 to €310,000 which will help children being left the family home, particularly in Dublin. The Minister promises further upward revisions.

5 The Home Renovation Initiative is being extended by two years to the end of 2018. It has been enormously popular especially among trader-uppers who find house supply in short order, and is not very expensive to administer, so this is good news.

6 Rent-a-Room Relief is being increased to €14,000 a year. The Minister hopes it will help the student market, but the issue of how many of them want to live in 'digs' is moot. It doesn't extend to Airbnb lets.

7 The City Living initiative now includes landlords, and the silly cap on maximum floor space has been abolished. There is massive under-use of above-the-shop properties in our cities, so this should see some appetite for regeneration.

8 DIRT tax has been reduced by 2pc to 39pc with a further 6pc drop promised. A cheap measure, given interest rates are close to zero, but it may help trader-uppers who are saving deposits but can't avail of the DIRT-free accounts first-time buyers get.

9 The Housing Assistance Payment scheme is getting an extra €105m, meaning 15,000 more families can avail of it. This 'temporary' solution is fast becoming permanent.

10 Increased funding was announced for the provision of housing adaptation grants for some 9,000 disabled and elderly people.

Sunday Independent

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