February 19, 2024
Sodium Valproate (Epilim) Inquiry
In November 2020, the Minister for Health, Mr Stephen Donnelly, announced that an inquiry would take place into the historical licensing and use of the epilepsy drug Sodium Valproate (also...
In September, the Economic and Social Research Institute (ESRI) released a paper detailing the impacts of Covid-19 on the already stressed Irish property market.
The paper predicted a likely decline in supply due to a pandemic-induced dip in investment, lack of development finance and more cautious lenders. This, the paper went on to say, will likely be coupled with a post-pandemic rise in demand – the result of a build-up of savings among civilians.
Potential buyers held their breath. After 20 years of chaos in the Irish property market, it seemed that Covid-19 would tip things over the edge again. But the recent financial bill 2020, due to be enacted in December, has put in place a significant number of measures to prevent the collapse of the market. And these measures may make 2021 a good year for first time buyers, and potential buyers in general.
Unprecedented Government support for housing and potential buyers
As part of Budget 2021, the largest budget in the history of the Irish State, and no doubt in response to forecasting by the likes of the ESRI, the Minister for Housing, Local Government and Heritage, Darragh O’Brien, TD, has made an unprecedented commitment of €3.1 billion on housing. This will include the largest social housing build programme in the history of the State. The housing-related measures include:
This is all good news for potential buyers and for the housing industry in general. First time buyers will, theoretically, find getting on the property ladder a much easier with these measures instated. Below, we set out the extension and enhancement of the Help-to-Buy (HTB) incentive as outlined in the Budget.
The Help-to-Buy incentive is a Government tax refund scheme designed to help first-time buyers get the deposit needed to buy a newly built home. Borrowers can claim a maximum of 10% of the value of the property or €30,000 – whichever is lower. This figure was increased in the July Stimulus package from the original €20,000 borrowers could claim when the scheme first came into effect in January 2017.
The HTB is a tax rebate scheme so in order to claim, the buyer must have paid the equivalent amount of income tax and/or DIRT in the preceding four years.
The HTB scheme was originally meant to run until December 31st 2020 but Budget 2021 extended the incentive until December 31st 2021. This is great news for first time buyers as in theory, this tax rebate can cover the cost of a deposit on a new property.
The unprecedented housing allocations in Budget 2021 will hopefully offset the effects of Covid-19 on the property market, and 2021 could be a good year to buy a house. There are, of course, a myriad of other economic challenges presented by the pandemic including unemployment, wage cuts etc. that will impact the housing market. But at the very least, the build of over 9000 houses and increase in affordability incentives should prevent an imbalance in supply and demand and reduce the risk of sharp spikes in house prices.
About the author: Annabel Caldwell, Solicitor on the Property Team
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