Up to 6,000 first time buyers will benefit from €20k tax rebate scheme
Housing Minister Simon Coveney is “confident” that measures to support first-time buyers (FTBs) will see an increase in the number of homes being constructed.
The tax rebate scheme, capped at €20,000, will be used to help prospective home-buyers secure a mortgage and could benefit between 4,000 and 6,000 FTBs next year.
Mr Coveney said the measure was just one of several being used to help ramp up construction of homes and help bridge the affordability gap which is complicated by tough Central Bank lending rules.
The minister said that he expected homes costing between €250,000 and €350,000 to be produced in Dublin, but prices would be lower outside the capital.
More than €1bn has been allocated across the entire housing budget.
“We are talking about increasing the budget for housing by 50pc in one year, up to €1.2bn,” he said. “This is a big priority for Government, and this Budget reinforces that for next year and beyond.
“We need to target the areas where there is market failure. When you combine current and capital (spending), you are talking about social housing accommodation for over 21,000 people next year – it’s 17,000 people this year.”
He said the housing measures were about addressing costs, and not just helping FTBs.
“They (the construction industry) don’t believe if they build a house in the numbers we need, that FTBs will be able to buy them. We’re reducing costs by streamlining the planning system, making public land available in a much more strategic and targeted way, and an infrastructure fund to offset some of the costs.
“We think it sends a really strong signal to developers and builders to get on and build homes.”
But he acknowledged there was little to help existing homeowners hoping to trade-up, beyond the extension of the Home Renovation Incentive which would allow them upgrade their homes or buy and refurbish a vacant property.
“A lot of people would have bought houses at a time they were very expensive and are looking to trade up now. I have a lot of sympathy for them,” he said.
“That’s where we want to see the extension of the HRI. We had to prioritise here. We could have tried to reduce the cost of every house. The problem then is you’re not prioritising the most vulnerable sector of the market.
“This is about supply, supply, supply. The numbers are big, I’m glad to say. I’m confident we’ll see a response from industry.”