With the growing issues related to the lack of housing supply in Dublin, are the government forgetting about Tenants and young families again in Budget 2017? Are we making the same mistakes all over again with this election budget?

There were a number of initiatives announced in the Budget this week that are aimed at addressing the shortage of housing, the most notable being the help to buy scheme.

The help to buy scheme will provide an income tax rebate for taxes paid over the previous four years. This is for any first time buyers who bought newly built homes and the rebate will be 5% of the purchase price, up to a max of €20,000 or a value of €400,000. No rebate will be paid on house purchases in excess of €600,000.

Any rebate received will be taken into account in the calculation of the deposit required to be eligible for a mortgage. This scheme is effective for purchases from 19 July 2016 to the end of 2019.

This will make a big difference for first time buyers.
Taking an average home value in Dublin of say €400,000 currently the borrower/’s must have a deposit saved of €58,000 and they must have a gross salary of c. €98,000. The Help to Buy Scheme would mean that the same borrowers would need a deposit saved of €38,000 but they still must have a gross salary of c. €98,000.

Unfortunately, all this is likely to do is drive up the prices as they will just increase to offset the tax rebate. If the seller knows that the first time buyer is getting extra money, why wouldn’t they look for a higher price?

What is quite unusual is that renters were ignored in the budget altogether and so were young families looking to expand and move into their second home.

Take a look at our blog – Getting Mortgage Approval for First Time Buyers

See full details of Budget 2017 here.