Donohoe fails to commit to extension of help-to-buy scheme

Decision on incentive to be made in context of Budget 2020, Minister for Finance says

Minister for Housing Eoghan Murphy with Minister for Finance Paschal Donohoe at the HBFI update on Tuesday. Photograph: Tom Honan

Minister for Housing Eoghan Murphy with Minister for Finance Paschal Donohoe at the HBFI update on Tuesday. Photograph: Tom Honan

 

The help-to-buy scheme has played a “valuable role”, the Minister for Finance has said, although he wouldn’t be drawn on whether the scheme will continue past the Budget 2020 in October.

Speaking on Tuesday, Paschal Donohoe said that any continuation of the scheme, like any other taxation measure, will be decided in the context of the budget for next year.

The Help-to-buy scheme, first introduced in April 2014, was designed to incentivise first time buyers to get on the property ladder by helping them with the deposit needed. Buyers can claim up to €20,000 on a new build property.

However, the scheme was introduced at a time when property prices were slowly recovering from their post-boom trough, a fact Mr Donohoe acknowledged.

“It was designed when our housing market was performing in a particular way. We have to assess what that scheme is going to look at in the future,” he said.

“When the help to buy scheme was put in it was as a way of recognising that there was an issue in relation to the purchase of new homes in the State. I don’t view it as a subsidy to developers. I view it as being a support to those who want to be home owners and want to make their first purchase.”

The Sunday Business Post reported earlier this month that Taoiseach Leo Varadkar signalled that the scheme will be extended.

And while Mr Donohoe wouldn’t be drawn on whether it will continue in operation, both he and Minister for Housing Eoghan Murphy said they have been discussing the matter already.

Both were speaking at the launch of an update by Home Building Finance Ireland (HBFI), a body controlled by the State established to provide funding for construction of new homes in the Republic, particularly outside the capital where some anecdotal evidence suggests banks aren’t lending.

Since it was launched on January 28th of this year, HBFI has financed €41 million worth of developments for 228 properties, suggesting an average cost of €179,824 per property. Some 73 units in Kildare Town have been financed, as have 69 units in Co Laois, while 12 have been financed in Dublin.

While the number of properties financed by the end of June represent just 3 per cent of the total the organisation plans to finance , Mr Donohoe said he expects the scheme to be particularly busy in years two and three. HBFI is expected to fund delivery of up to 7,500 units over a five year period.