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Will the help-to-buy scheme be extended or scrapped? Minister won't rule it in or out until Budget 2020

Minister for Finance Paschal Donohoe said the scheme has played a ‘valuable role’.

A decision will be made in the context of Budget 2020, says Minister Paschal Donohoe.
A decision will be made in the context of Budget 2020, says Minister Paschal Donohoe.
Image: Shutterstock/Albert Pego

THE HELP-TO-BUY Scheme for first-time buyers has played a “valuable role”, according to Minister for Finance Paschal Donohoe, but today he would not say whether he plans to extend the scheme. 

The incentive was designed to assist buyers with obtaining the deposit required to purchase a new home. 

It provides for a tax refund (of DIRT paid over the previous four years) to first-time-buyers – up to 5% of the purchase price and a maximum of €20,000.

As the expiration date for the scheme – 31 December 2019 – approaches, questions are being asked about whether it will continue. 

When pressed on the matter today, Donohoe said he would be making the decision to extend or discontinue the scheme in Budget 2020.

“I know it has played a very valuable role in the purchase of homes both last year and this year in particular,” he told reporters. 

The minister said the scheme was put in place as the government recognised there was an issue of affordability facing buyers. 

“It was designed when our housing market was performing in particular way. We have to assess what the scheme will look like in the future,” he added. 

He said he didn’t view the scheme as providing a subsidy for developers, but said he sees it as a “support to those who want to be homeowners”. 

Former Central Bank governor Philip Lane told the Oireachtas Finance Committee in April 2017 that“of course” the impact of the scheme was to drive up house prices.

However, last month a report by Goodbody stockbrokers said the government may have to extend the scheme into next year in order to achieve its housing supply goals. 

Donohoe said he was not going to start making Budget announcements ahead of October, with Housing Minister Eoghan Murphy stating today that the decision to extend the scheme will be a matter for the finance minister. 

Murphy said conversations about the scheme in the budgetary context will continue. 

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