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'It's fundamentally flawed': Sinn Féin hits out at revised first-time buyers scheme

Under new rules,first-time buyers will receive a grant if their mortgage is 70% of the value of their home.

Image: PA Wire/PA Images

SINN FÉIN HAS called on the Government to scrap the now revised first-time buyers scheme as it is “fundamentally flawed”.

The new relief programme was designed to help people get on the property ladder. However, the party’s finance spokesman Pearse Doherty said it would, in fact, drive up the prices of homes.

The scheme is aiming to help first-time buyers save for a deposit by offering an income tax rebate of up to 5% of the value of new homes which are valued at up to €400,000.

It’s understood that the Central Bank has raised concerns about the scheme. Sources said the bank has been in close contact with government to ensure that the scheme doesn’t encourage buyers to take on too much mortgage debt.

It’s believed the Central Bank this evening has called on the Government to reduce that rate to 70% – as the higher percentage is promoting buyers to take on more debt.

Fianna Fáil’s housing spokesman Barry Cowen told TheJournal.ie last week that the ceiling cap of €600,000 is “off the wall” and has called for it to be reduced to €400,000.

It has yet to be confirmed if this amendment will be included in the Finance Bill which will be published at 2.30pm tomorrow.

Central Bank

Doherty is not happy with the proposals and believes any grant such as this will lead to an increase in housing prices.

He said: “The scheme announced by the government in last week’s budget is fundamentally flawed as is Fianna Fáil’s version of this scheme.

This scheme can only drive up house prices and it should be scrapped.

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“Fine Gael and Fianna Fáil are engaged in the failed boom and bust politics of the past and today’s announcement is more about the battle to claim credit for this flawed scheme than it is about helping young first time buyers.”

Major changes are expected to be announced to the scheme tomorrow.

With additional reporting by Christina Finn

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