Help to Buy Scheme

Well, it looks like we're getting a new help-to-buy scheme for FTBs.

http://www.breakingnews.ie/ireland/...l-not-done-yet-says-john-halligan-733751.html

Did these schemes not help fuel the property boom in the first place?

That is really terribly stupid.

There would be some sense to having a help to buy scheme for newly built houses, whether bought by FTBs, second time buyers or investors. But it would be better still to stop taxing the building of new houses.

Brendan

I certainly agree that it's a terrible idea but I disagree that it makes sense to incentivise the purchase of new builds over existing housing stock.

Any incentive of that nature just gets added to the price of the new build and ends up in the builder's pocket.

That was the case when rates were abolished for new builds and when new builds were exempt from stamp duty. It's just a subsidy for builders.

Hi Sarenco

I was opposed to them as well on the same grounds as you. But then I realised the ridiculous level of taxes on new builds - these are a negative subsidy. I would prefer to see these taxes reduced and no subsidy. But it might be easier to leave the taxes and introduce a subsidy.

It seems that Noonan has been half listening to me on this one.

Tax break for new house buyers mooted by Michael Noonan

"New house buyers could be in line for a tax break in Budget 2017, Minister for Finance [broken link removed] has signalled.

Speaking at the Oireachtas committee on housing and homelessness, Mr Noonan poured cold water on suggestions that VAT on the construction sector would be reduced from 13.5 per cent to 9 per cent.

He said he would rather introduce a tax break that would “put money in the pockets of purchasers rather than in the pockets of builders”.

“The model I am looking at is the very successful tax breaks for home extensions.”

This scheme allows homeowners to claim the VAT rate on their renovations over the subsequent two tax years, so 13.5 per cent of what is spent on the property is returned as a tax credit.

A similar scheme for buyers was “under active consideration by my department”, he told the committee."

They should bring it in immediately to get house building going again.

I am not sure about the argument of “putting money in the pockets of purchasers rather than in the pockets of builders”. If the government gives buyers of new homes more money, it will end up in the pockets of the builders.

It would be far simpler to just stop taking money out of the pockets of builders in the first place.

Brendan

I'm a bit slow. How is this going to help the supply issue?