Some 120 apply for Help-to-Buy scheme as fears raised of impact on house prices
Some 120 applications were made within a matter of hours as the new Help-to-Buy scheme for first-time buyers opened.
The scheme opened for applications yesterday and allows first-time buyers of new homes an income tax rebate of up to €20,000 to fund their deposit.
But with an early surge of applications online, Fianna Fáil warned that its impact on prices would need careful monitoring.
The new scheme allows for a refund of income tax and DIRT paid over the previous four years, but not USC or PRSI.
Up to 5pc of the purchase price of a home costing up to €400,000 can be claimed, up to a maximum of €20,000. The rebate applies to homes costing up to €600,000 if purchased or built between July 19 and December 31 last. From January 1 this year, a €500,000 price ceiling applies.
There are two stages to the Help-to-Buy online process - an application stage and a claim stage. By 1pm yesterday, 120 online applications had already been received, according to a spokeswoman for the Revenue Commissioners.
A statement said: "The provision of this online facility means that customers can make their application or submit their claim at any time that is convenient for them. This is in keeping with Revenue's commitment to providing customer-friendly systems to make it as easy as possible to do business with us."
Fianna Fáil finance spokesman Michael McGrath said the impact of the scheme on house prices would need to be "carefully monitored" as part of an independent impact assessment.
"History has taught us that any intervention in the property market has to be based on detailed analysis, but this has not been done in respect of this scheme," he said.
"However, we secured a commitment from [Finance Minister Michael] Noonan that such an independent assessment would be completed by September 30, 2017, and that this would assess the impact of the scheme on house prices, the supply of new homes and the property market generally."
He added: "This impact assessment will need to answer the key question as to whether the 'Help-to-Buy' scheme is pushing up new house prices."
The Help-to-Buy scheme opened on the same day that property website Daft.ie reported an average house price increase of 8pc last year.
Prices increased sharply in Cork, Galway, Limerick and Waterford cities.
Ronan Lyons, economist at Trinity College Dublin and author of the Daft.ie Report, said: "Overall, the market continues to be characterised by strong demand, albeit limited by Central Bank rules, coupled with very weak supply - both of new and second-hand homes.
"This year has seen a number of measures that will serve to stimulate demand in the years ahead. Hopefully next year, the focus will be on supply."