Darragh O’Brien, the Housing Minister, is advocating for an extension and enhancement of the ‘Help to Buy’ initiative provided by the state, aiming for it to continue past 2025 and well into the subsequent government’s tenure. The scheme, presently due to end next year, is under threat of being abolished by Sinn Féin – a move that is supported by critics who believe the initiative is causing a surge in property prices. Sinn Féin could execute this act if they come into power after the next general election.
However, insider sources reveal that Mr O’Brien perceives a continuation of the initiative as being vital to his department’s budget, despite its formal management falling under the Department of Finance due to its taxation-related nature. This initiative provides a tax rebate for first-time homeowners, potentially worth up to €30,000.
There are also anticipations that he might propose raising the cost cap for homes eligible for the scheme, enduringly established at €500,000, in the upcoming October budget. Information from insiders suggests that he plans to implement regional differences to this cap, in response to variations in property prices across the country since the cap was set in 2016.
Accompanying this, estate agent Savills, in a pre-budget submission, has recommended that the threshold be increased to €614,000 for housing in Dublin. They attribute this to a hike in the costs of construction and consumer inflation since the inception of the initiative. They are also encouraging that the scheme continue until December 2028.
With the discontinuation of the summer break, mounting speculation around an autumn election indicates that housing will be a pivotal issue during the election campaign.
Sinn Féin is preparing to roll out their comprehensive housing strategy in the early part of September. The party made a commitment in their affordable housing programme released last week to supply 50,000 affordable properties for both rent and purchase. The proposed rents are to be set at €1,000 per month and the affordable homes for purchase are not expected to cost more than €300,000.
Mr O’Brien’s budget wishlist is anticipated to include a more substantial grant for renovating abandoned properties. If it’s not included in the October release, it’s expected to feature in the Fianna Fáil’s manifesto for the upcoming general election. Those who purchase an empty home could be eligible for grants of upwards of €50,000 to use towards investment in the property, or €70,000 if it’s officially classified as derelict.
There is talk of a yet-to-be-released review of the scheme recommending that the higher allowance for disused properties be increased to €80,000. Renter’s tax credit, currently €750, has also been identified for possible escalation, with insider sources suggesting a bump to not less than €1,000 as a goal.
As the Cabinet won’t convene till September and the Dáil is currently in summer recess, Ministers are using the break to finalise their budget requests. The Enterprise Minister, Peter Burke, is expected to lobby for a rise in the R&D tax credit and to prolong current schemes. Both Fianna Fáil and Fine Gael are aiming to restructure inheritance tax, advocating for the 33% Capital Acquisition Tax (CAT) threshold to be increased by up to €65,000. The tax currently applies to inheritances over €335,000.
Expectations are that a slew of one-off payments will be implemented, including double child benefits and various modifications to disability and age-related benefits. The universal social charge is also up for potential adjustment. Additional electricity credits and a reduction in VAT on broadband bills have also been discussed.