Fianna Fáil to abstain from vote on help-to-buy scheme

Fianna Fáil is to abstain in a vote on the first-time-buyers' scheme announced in the budget.

The party's housing spokesman Barry Cowen said the proposal will "undoubtedly put prices up".

Mr Cowen said Fianna Fáil is concerned that the grant is limited to new homes and said the eligibility is restricted.

The help-to-buy scheme for first-time buyers will give a rebate of income tax of 5 per cent of the purchase value of a newly built home, up to a value of €400,000.

That translates to a maximum rebate of €20,000 in cash.

Properties costing from €400,000 to €600,000 will qualify for the €20,000 rebate, but the scheme will not apply to homes over €600,000 in value.

Mr Cowen said an impact assessment of the scheme must be carried out in full before the party can offer its support.

Tax returns

Putative property buyers hoping to avail of the scheme, will have to file tax returns in order to qualify for the scheme, it emerged on Wednesday morning - even if they have never done so before.

According to the Revenue Commissioners, applicants who pay their taxes through the PAYE system will need to register with myAccount, the Revenue’s personal tax portal, and must show that they are “fully tax compliant” for the years for which they are claiming income tax back.

To do this, they will need to complete an income tax return, Form 12, for each of the relevant four years.

The rebate will apply to people buying homes newly built by developers and people building one-off houses, and no relief will be given to those buying second-hand houses.

The scheme is also only available to people who are taking out a mortgage of least 80 per cent of the purchase price, or in the case of a self-build, 80 per cent of the valuation approved by the mortgage provider.

The well-flagged incentive will be available to buyers who signed contracts to buy on or after, July 19th.

Self-build

In the case of a self-build, applicants who drew down the first tranche of their mortgage on or after July 19th will also be eligible. This scheme will run until the end of 2019 and is expected to cost €50 million.

Minister for Finance Michael Noonan said the measure would serve to increase the supply of new housing, which remains extremely low, with fewer than 10,000 homes built across the State up to the beginning of last month.

“In all markets, supply increases to meet demand and the help-to-buy scheme will increase the demand for newly built houses by assisting first-time buyers to put a deposit together. I expect the building industry to meet this additional demand by increasing the supply of new affordable homes,” he said.