The Irish Mortgage Brokers Association finds flaws with proposed tax scheme...
First-time buyers are set to get a financial leg-up from the Government, with a “very generous” grant to be included in Budget 2017.
Unlike a British scheme which involved the State taking an equity share in the property, the help-to-buy grant will involve upfront tax repayments.
The Irish Independent has revealed that Housing Minister Simon Coveney will roll-out the scheme as part of October’s budget, but precise details and costs have not been confirmed as yet.
While the move is being made with the intention of helping prospective homeowners, concerns have been raised that it will only serve to force property prices up even further.
Speaking to Newtalk Breakfast this morning, Karl Deeter of the Irish Mortgage Brokers Association argued that a tax refund scheme isn’t the best solution to the problem.
Indeed, he warned “it make actually push up the price” and that, outside of Dublin, the scheme could also prove to be overkill:
“We're going to be helping people, potentially, that don't even need it.”
“There's a lot of things about this that cause me concern,” he continued.
“The best method, in my view, would be to get so many of the issues in the general housing market that the people don’t necessarily realise even exist, and work through those, to just create a lot more housing and bring down the price of housing.
“I think high-cost housing is damaging to a country, it’s damaging to individuals as it doesn’t do anybody any good except for the people who sell housing for a living.”
Minister for Finance Michael Noonan is also said to be exercising caution to ensure the scheme will not interfere with either the supply or demand for housing.
Coveney will publish details of the scheme as part of the Government’s new housing action plan later this week.
The plan will also place an emphasis on increasing the supply of starter homes in Dublin – currently no house in the Dublin area can be bought for less than €300,000.
The Government has also signalled that it will make no attempt to interfere in a Central Bank review of its controversial rules on deposits for homebuyers, with Coveney saying he has no power to tell the Central Bank what to do.