Major changes to be made to first-time buyers scheme in Budget 2017

The Finance Bill will see amended mortgage rate levels

Major changes to be made to first-time buyers scheme in Budget 2017

Finance Minister Michael Noonan | Image: RollingNews.ie

The Government is set to make major changes to the first-time buyers scheme, which was announced in Budget 2017.

The Finance Bill to be published tomorrow will give legislative effect to the tax changes outlined in the budget.

But this will also see changes to the help-to-buy scheme.

The scheme was outlined on Budget Day, which would see it applied to people who got a mortgage of at least 80% of the purchase price.

However, it is believed the Central Bank raised concerns that such a move would leave people taking on too much debt.

Central Bank data was said to show that the average mortgage was actually 70% of the purchase price.

It is understood Mr Noonan has taken this advice on board, and will announce changes tomorrow.

Another change to be announced is the threshold at which this scheme applies.

It was announced on Budget Day that the scheme would see a tax rebate worth up to 5% of the price of a home to a value of €400,000, allowing for a maximum rebate of €20,000.

But pro rata rates applied mean a similar rebate would also be available on houses up to €600,000.

It is now believed this ceiling will be put back to just €400,000, following objections from Fianna Fáil.

It is understood this measure will not be contained in the Finance Bill, but be changed at a later date.

The Irish Times political correspondent Fiach Kelly, who broke the story, told Newstalk Drive it is a significant change.