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Help-to-Buy for first-time home-buyers set to be extended in coming Budget

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Housing minister Eoghan Murphy. Photo: Collins

Housing minister Eoghan Murphy. Photo: Collins

Housing minister Eoghan Murphy. Photo: Collins

The Government's Help-to-Buy scheme, which has helped thousands of first-time home-buyers, is set to be extended in next month's Budget.

The tax refund of up to €20,000, which helps first-time buyers with a deposit for buying new-build homes up to the value of €500,000, is due to expire at the end of this year.

The Government now believes allowing it to end would cause too much disruption to the housing market. Taoiseach Leo Varadkar, finance minister Paschal Donohoe and housing minister Eoghan Murphy are all believed to be agreed on the need for it to be retained. However, it could be modified to lower the cap.

A Government source said: "You have to retain it, because if we didn't, it would completely disrupt the market, it would be kind of a shutter coming down."

The Construction Industry Federation called for the extension of the scheme in its pre-Budget submission, saying it has "had a huge impact in driving growth in annual output".

Fianna Fail has also demanded that the scheme be extended and retained at its current level in the Budget, but Government sources have suggested the €500,000 cap could be changed.

Reports that the cap could be lowered to properties worth €250,000 - a level that would exclude most homes in Dublin - have been dismissed, however.

A senior Government source said: "There have been proposals to continue it, but in a reformed manner. If it was to continue, it wouldn't exclude Dublin."

The scheme has helped around 30,000 first-time buyers since it was rolled out in 2016 and has cost the Exchequer around €200m.

Figures provided to Fianna Fail's finance spokesman Michael McGrath in July show it would cost €50m a year to extend the scheme. However, the scheme cost €73.2m last year and €35.4m in the first five months of this year. The average grant for each home is just under €15,000.

While Mr Donohoe has been tight-lipped in advance of the Budget announcement on October 8, he said in July the scheme had played "a very valuable role in supporting the purchase of homes across last year and this year in particular".

Mr Varadkar has also hinted at an extension, saying recently it "will help many more people in the future".

Sunday Independent