Tax rebate for first-time buyers and €100m war chest to help homeless
A help-to-buy scheme is the main incentive from the Government to address the shortage of homes.
First-time buyers building new houses will be offered a rebate of income tax paid over the previous four tax years up to a maximum of 5pc of the purchase price of a new home up to €400,000.
Pro rata rates will apply to lower-priced houses and a full rebate calculated on €400,000 will also apply to houses over €400,000 and up to €600,000. No rebate will be paid on house purchases over €600,000.
It remains to be seen how successful the scheme, for new-builds only, will be in Dublin, where space is at a premium and land prices costly.
First-time buyers will secure a letter from the Revenue Commissioners setting out the amount of rebate to be claimed, which will be provided to a mortgage lender.
This amount will be used to part-fund a deposit, and the money will be paid by Revenue to the purchaser and the cash remitted to the bank.
The amount claimed from Revenue must have been paid in taxes over the four-year period. You cannot claim more than you have paid in tax. A mortgage of at least 80pc of the purchase price must be drawn down. This is to eliminate cash buyers from the scheme.
The housing measures were welcomed by Jim Clery, head of real estate at KPMG.
"The key measure is the Help-To-Buy scheme, which we hope will assist first-time buyers raise the necessary deposit to acquire their first home. It is highly targeted. We think it should help supply to increase," he said.
Second-hand properties are not included in the Help-To-Buy scheme, but the Home Renovation Incentive Scheme will be extended by two years to the end of 2018.
This measure provides tax relief to home-owners who undertake renovations.
Mortgage interest relief for residential property landlords will be increased by 5pc to 80pc next year and will eventually be 100pc following a phased restoring basis.
One of the main issues surrounding housing in the capital has been the homeless crisis, with almost 1,000 families in emergency accommodation in August.
In response, the Govern- ment announced the allocation for emergency accommodation for homeless people would increase by €28m to €100m.
Landlords and renters have been given a slight boost with the announcement that the income ceiling that applies under the Rent-A-Room scheme has been increased by €2,000 to €14,000.