Dáil Éireann Debate, Monday - 11 September 2023
490. Deputy John Lahart asked the Minister for Finance following several inquiries from younger persons eager to access the property ladder, if he is considering measures such as individual savings accounts (ISAs) to enable first-time buyers to work towards a deposit, which would also act as an alternative mode of investment; and if he will make a statement on the matter. [39076/23]
View answerIn 2021 the Government launched the Housing for All (HfA) strategy, a multi-annual, multibillion euro plan which will improve Ireland’s housing system and deliver more homes of all types for people with different housing needs. HfA provides for a range of direct expenditure measures to support to assist first time buyers.
In addition, the tax-based Help To Buy scheme (HTB) assists first-time purchasers with the deposit they need to buy or build a new house or apartment.
The incentive offers a refund on Income Tax and Deposit Interest Retention Tax (DIRT) paid in the State over the previous four years, subject to limits outlined in Section 477C of the Taxes Consolidation Act 1997. HTB allows claimants to select all or any of the previous four tax years for the purposes of calculating the refund available to them. Enhancements to the scheme were provided for in Section 8 of the Financial Provisions (COVID-19) (No. 2) Act 2020 such that the maximum rebate is currently the lower of:
• €30,000 (increased in 2020 from €20,000);
• the total income tax and DIRT paid in the previous four years; or
• 10 per cent (increased in 2020 from 5 per cent) of the purchase price of a new build property, including self-builds.
The scheme, which is scheduled to sunset at the end of 2024, is open to all qualifying first-time buyer/builder taxpayers regardless of their current tenure status and any difficulties of the type set out in the question.
In relation to the specific proposal for a special savings incentive account type measure, and as the Deputy will appreciate, decisions regarding tax incentives and reliefs are normally made in the context of the annual Budget and Finance Bill process. Such decisions must have regard to the sound management of the public finances and my Department's Tax Expenditure Guidelines. The guidelines make clear that any policy proposal which involves tax expenditures should only occur in limited circumstances where there are demonstrable market failures, where a tax-based incentive is more efficient than a direct expenditure intervention.
