Grant scheme for first-time buyers to only see minor changes
Varadkar and Murphy had previously indicated possible scrapping of grant scheme
Minister for Housing Eoghan Murphy. The controversial grant scheme for first-time buyers is to remain almost completely unchanged in next week’s budget
The controversial grant scheme for first-time buyers is to remain almost completely unchanged in next week’s budget despite previous consideration of it being scrapped entirely or amended. It means that the existing system of an income tax refund of as much as €20,000 will continue to be granted for newly-built homes valued up to €500,000.
Despite initial opposition to the scheme, introduced in last year’s budget, Fianna Fáil does not view its retention as a reason not to support this year’s tax and spending package.
Taoiseach Leo Varadkar and Minister for Housing Eoghan Murphy had previously indicated it could be scrapped. Methods of retaining the scheme but amending it, such as allowing the State take equity in the home, were also examined.
It is now understood, however, that it will be left untouched apart from some minor changes.
“There may be some small changes,” said a well-placed source. Retaining help to buy has been a key goal of industry groups such as the Construction Industry Federation.
Fianna Fáil sources are now signalling they will not oppose retaining the measure, and say it is not an element of the confidence and supply deal that underpins the minority Government arrangement.
An increase the level of Housing Assistance Payments (HAP), a social welfare support for people who have a long-term housing need, is also expected to be announced by Minister for Finance Paschal Donohoe.
The party is also pushing for a substantial increase in capital allocations for housing above the €788 million set aside by the Government next year for social and affordable housing.
Sources said Fianna Fáil was pushing for this to be doubled, although it is accepted that any increase will not be of such on order. It is hoped, however, that the capital outlay for housing will exceed €1 billion.
Among the parties to call for the Help-To-Buy scheme to be scrapped are Sinn Féin and Labour, which says its abolition would save €40 million.
Labour has also said there should be no cuts in income tax next year, and has argued that the limited resources available should instead be focused on public services. Income tax cuts that would only give people back enough money for a “cup of coffee” are not worth diverting funds from public services.
This position is also shared by the Social Democrats, which launched its pre-budget submission on Thursday. The party says now is not the time to cut taxes, and that all resources should be spent on issues such as tackling the homeless crisis.
It also wants to challenge the EU fiscal rules which limit the amount of money that can be spent in the budget.
Mr Ryan said the towns would bid to participate in the trial, which would see everyone receive at least €200 through welfare payments. This would include younger people on the dole who currently receive less than €200.
The Dublin Bay South TD said the idea has the potential to reinvigorate 19th century market towns across Ireland.