Budget 2023: Cork TD welcomes the retention of Help to Buy scheme

A Cork-based Government TD has welcomed the retention in Budget 2023 of the Help to Buy Scheme, which allows first-time home-owners tax relief of up to €30,000.

Pádraig O’Sullivan, Fianna Fáil TD for Cork North-Central, said he had been making representations to Cabinet and he was delighted the scheme would be retained.

Delivering Budget 2023, Finance Minister Pascal Donohoe said the scheme will be kept under review.

He said 35,000 people have benefitted from the scheme since its inception in 2017.

The Help to Buy scheme helps first-time buyers to purchase a newly-built house or apartment, and it also applies to once-off self-build homes.

Under the scheme, first-time home-owners who buy or build a property that costs €500,000 or less may be entitled to claim a refund of income tax and DIRT that you paid over the previous four tax years.

The maximum relief available was temporarily increased in 2020, and this increase has been extended in subsequent budgets, with today’s announcement meaning the increased relief will now apply until 31 December 2024.

Mr O’Sullivan said uncertainty about whether the current rate of relief would be retained had caused anxiety for first-time buyers, but he believed the budget announcement was good news.

“It’s a very positive decision that the Help to Buy scheme is maintained, because it is something which is of huge benefit to first-time buyers, giving them up to €30,000 back in their pockets, which is much-needed cash,” Mr O’Sullivan told The Echo.

Mr O’Sullivan had last week said other parties in Government had not been as insistenton the scheme being retained, but it was is an essential part of Fianna Fáil’s Housing for All policy, and he added that opposition parties had called for the scheme’s aboilition.

CRITICISM

Sinn Féin has said the Help to Buy scheme has fuelled property inflation, citing a report from the Oireachtas Parliamentary Budget Office (PBO), which conducted an analysis of the scheme from its inception in 2016 to the end of 2021.

The PBO said its findings “suggest the scheme is poorly targeted" and that 63% of help-to-buy claims last year were for properties valued above the national average price.

The PBO calculated that a third of all recipients already had the 10% deposit needed for a home by examining the loan-to-value ratio of mortgages, and could then use the scheme to boost how much they had for a deposit.

"This increased the purchasing power of first-time buyers, which fuelled property inflation and created a deadweight loss," the PBO said.