A new scheme to provide first-time buyers with assistance in purchasing a home will be tied in with incentives for developers to build new houses.
The Government is working on a so-called help to buy scheme for first time-buyers, which will be outlined by Minister for Finance Michael Noonan on budget day.
It is understood this scheme will be much broader than initially envisaged in order to “incentivise the construction of more starter homes”, according to sources.
Minister for Housing Simon Coveney yesterday unveiled his action plan for housing.
It aims to increase the number of homes built per year to 25,000 by 2021. It also aims to provide 47,000 social housing units in the same period, with funding for social housing increased to €5.35 billion from a previously announced €3.7 billion.
Backdated
Mr Coveney confirmed that any measure for first-time buyers and developers would be backdated to yesterday to ensure there was no adverse effect on the market.
Figures involved in preparing the action plan said the value of any package for first-time buyers must be about €10,000 per couple to have tangible impact.
The Fianna Fáil manifesto contains proposals for a mortgage deposit top-up scheme for first-time buyers worth €10,000 per couple, or €5,000 for an individual.
Party sources said the Government proposal “will have to be similar” in value in order to guarantee support for the budget.
The Fianna Fáil proposal, however, is for a top-up to mortgage deposits. It is understood the scheme being worked on by the Government is a combination of assisting first-time buyers with tax rebates and helping with top-ups to cover a mortgage deposit.
The Department of Finance is cool on the idea of providing assistance to first-time buyers without corresponding measures to boost supply.
The help to buy scheme will also contain measures to incentivise the development of affordable homes. “It will be combination of affordability measures for first-time buyers and developer incentives,” a source said.
Normality
The programme for government contains a commitment to expand a rebate scheme for development contributions within the Government’s first year of office and it is understood similar moves could be examined ahead of the budget.
“What you don’t want to do is increase the capacity for first-time buyers to spend more without actually having a corresponding increase in supply,” Mr Coveney said.
“I think it will be done through the tax system in the form of a rebate and there will obviously be parameters for it in terms of the value of the house that a first-time buyer gets support to buy.
“We’re not in the business of supporting the purchase of mansions. This is about the sensible provision of family homes that first-time buyers need to access.”
Mr Coveney said his plan aimed to bring “normality” to Ireland’s deeply dysfunctional housing sector.
It comes as the latest homeless figures, published by the Department of Housing last night, showed there were 6,358 people in emergency accommodation during the week of June 20th to 26th.
