First-time homebuyers with higher incomes have gained the most from the Help-To-Buy (HTB) scheme over the last six years, recent data reveals. Housing Minister Darragh O’Brien is advocating for the scheme’s extension beyond its projected termination next year.
The Central Bank reported on Wednesday that the programme, providing tax rebates up to €30,000 for first-time buyers, has been utilised by nearly a third of these borrowers over the timeframe. The initiative cost the Revenue €938 million by the close of 2023.
The average household income of those using the HTB scheme was €15,500 higher compared to first-time buyers not taking advantage of the subsidy, primarily because they generally purchased pricier properties.
The average house price difference of €62,800 is attributed to the scheme being limited to new homes, which are often more spacious with superior energy ratings compared to pre-owned ones listed for sale.
In Dublin, the difference was lowest, at €27,000, due to a €500,000 price limit for properties under the scheme.
This report emerges as Minister O’Brien is pushing for the HTB scheme’s extension beyond 2025, far into the tenure of the subsequent administration, as a key priority for next week’s budget.
The present scheme set to expire at the end of next year has been criticised for inflating house prices. Sinn Féin has pledged to terminate this arrangement if they come into power after the next general election.
There’s a push by the Housing Minister to increase the €500,000 limit that has been in place since the inception of the scheme in 2016 in the Budget 2025. This proposed extension is viewed as primarily beneficial to lower income earners who have not been in a position to access the maximum €30,000 subsidy available under the current scheme.
The inquiry by the Central Bank neglected to consider the scheme’s influence on housing costs or the introduction of borrowers into the marketplace who would have otherwise encountered borrowing restrictions under regulations implemented by the watchman in 2015.
In advance of the budget proposal, Savills, a real estate agency, urged for the threshold to be elevated from €500,000 to €614,000 for properties in Dublin. They reasoned this due to the surge in building expenses and consumer inflation since the scheme’s inception. Furthermore, the property firm advocated for the continuance of the scheme until December 2028.