Budget 2018 was announced last week by Finance Minister Paschal Donohoe, where he pledged €1.83 billion towards a host of new housing measures to tackle the current crisis.
First things first, the Help-to-Buy scheme that was under threat in the run up to last week’s announcement has been retained. This will come as a relief to first-time buyers (and home builders!) who might have heard talk by an Taoiseach a few months ago about scrapping the whole initiative as it appeared to be driving up prices for everyone. While many within the industry suspect that this is actually the case, the Government are adopting a ‘wait and see’ approach and will intervene if the scheme is proven to negatively impact the new homes market over the next year.
What this means is that first-time buyers purchasing a newly-built home may be eligible for a 5% refund of either the purchase price of the home or the contract price of the home, whichever costs less, by way of tax relief based on DIRT and income taxes paid over the past four years to a maximum of €20,000. It is worth noting that the price of the property in question must be less than €600,000, with the applicant securing a mortgage with a loan to value, or LTV, no less than 70%.
The National Asset Management Agency, or Nama, is currently winding down its operations and will evolve into the Home Building Finance Ireland, or HBFI. This new agency has been tasked with lending to home builders in order to get housing built on development-ready sites immediately. HBFI has been allocated a €750 million fund initially and it must make affordable development finance available to small and medium-sized property developers so that they can start building new homes. It is expected that this Budget initiative alone can help provide up to 6,000 new houses and apartments. Although critics of the newly-announced lending body are worried that the HBFI will play favourites with their past Nama clients. Only time will tell. To further help this along, it was announced that the vacant site levy will more than double on land that is not developed within 30 months of purchase, after 2018.
Every private buyer and seller is affected by the lack of available social housing as it drives more and more people into the already-struggling rental market and it drives up competition for the few affordable properties on the market right now. So, it is good news that Minister Donohoe has pledged to deliver an extra 3,800 new social housing properties by 2021 – although it is unclear whether these are in addition to the homes promised by former Housing Minister Simon Coveney in ReBuilding Ireland last year. In any event, the new properties will be made available for families currently placed on local authority waiting lists.
If you are unsure about how Budget 2018 will affect you in terms of buying or selling your property, contact us directly for immediate, discrete and expert advice.
If you are considering selling in the South Wicklow and North Wexford areas, call into one of our offices (located in Carnew and Gorey) and chat to any of our expert team or you can contact us online at kinsellaestates.ie. We are happy to facilitate overseas buyers and sellers via Skype or similar, outside of regular office hours.
Alternatively, email me directly on firstname.lastname@example.org or telephone : +353 53 94 21718