Property group calls for retention of Help-to-Buy scheme

Property Industry Ireland claims it is too early to assess value of initiative

 

Property Industry Ireland (PII) has called for the retention of the Government’s controversial Help-to-Buy scheme in next month’s budget so as to give certainty to the market.

The Ibec-affiliated group that represents businesses in the property and construction sector claimed it was too early to assess the full impact of the initiative as it was only introduced in Budget 2017.

“It can take up to 18 months to build a new home, so placing the spotlight on a scheme that is less than one year old diverts attention away from the real factors causing the housing crisis; the lack of supply,” PII director David Duffy said.

The scheme, which gives a maximum €20,000 income tax refund for first-time buyers of newly built homes, was expected to be abolished by the Government on the grounds that it had fuelled further inflation in the property market.

However, there is now speculation that Minister for Finance Paschal Donohoe may opt to retain the scheme but under a revised format with the State possibly taking equity in homes rather than providing grants.

In a pre-budget submission, Property Industry Ireland said while significant progress had been made in tackling the multitude of crises facing the Irish housing market over the past year, a chronic shortage of supply remains.

“We are still facing a situation where the speed of demand for accommodation remains significantly higher than the speed of new homes being built,” Dr Duffy said.

“That is only set to continue as our population increases and as the influx of FDI (foreign direct investment) expected post-Brexit places further demands on our housing and infrastructure,” he said.

In its submission, the organisation called on the Government to prioritise the supply of new rental properties and establish a rolling fund for the provision of local infrastructure to under-serviced zoned land that has the potential to deliver housing or commercial development.

It also said the Government should identify and sell any state or semi-state property holdings identified as part of Rebuilding Ireland Housing Land Map, which are currently not fully utilised and which could be purchases by the State at below market rates.

It is also seeking a review local authority financing to ensure that local infrastructure and services are adequately financed.

The organisation also wants the Government to establish an independent national infrastructure authority to identify and prioritise Government spending on infrastructure projects.

The Government recently announced plans to reduce the proposed allocation to the State’s so-called rainy day fund, which commences in 2019, to allow for extra spending on infrastructure.

However, even with the additional spend, Ireland’s per capita spend on infrastructure is below that in competitor countries.