Property groups want Help To Buy tax break expanded beyond first-time buyers

Irish Institutional Property (IIP), a recently-formed lobby group for large property investors here, has urged the Government to extend the Help To Buy scheme for residential property and to expand it beyond first-time buyers.

In a budget submission to the Department of Finance, IIP asked that the initiative be extended beyond the December 2019 deadline, and “would further ask that confirmation of extension is provided prior to Budget 2020”, which will be delivered on October 8th.

It said such a move would “provide certainty” in the marketplace, and assist in delivering on the Government’s commitment for 550,000 additional houses by 2040.

IIP also said there was a “significant opportunity to widen the scope of the Help To Buy incentive to include groups such as current owner-occupiers who need to trade up but are effectively tied in to their current homes as there are no supports in place to enable them to make that move”.

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Help To Buy was introduced in January 2017, and offers tax rebates of up to €20,000 to first-time buyers purchasing a new build house worth up to €500,000. By August 2019, some €206.4 million had been claimed under the scheme.

IIP also calls on the Government to “maintain tax certainty and stability” for institutional investors, adding that large-scale apartment developments involving significant equity commitments and debt arrangements were being delivered by its members. These multi-year projects needed “predictability and certainty”.

Construction costs

"Maintaining certainty of regime and preventing further escalation of construction costs is key," IIP said in its submission. "If Ireland does not maintain tax policy certainty and stability we are at risk of foreign capital being deployed to other competing jurisdictions and markets."

IIP also wants Minister for Finance Paschal Donohoe to double the current two-year window that applies to refunds for residential schemes on the 6 per cent stamp duty rate that applies on property transactions.

“It is a serious constraint for multi-phase developments where, although each phase may be completed under a separate commencement notice, there can be cases where more than one phase is built upon a single podium or underground car park, and there is uncertainty over whether all phases must be completed within two years of the commencement of construction of the podium or car park.”

IIP said doubling the period to four years would provide a “more reasonable timeframe for developments to be completed”.

In addition, it wants the scheme extended to include construction operations commenting before December 31st, 2023, and completed before the end of 2027. This compares with a current deadline of December 31st, 2021, for the start of construction work.

Investors

Led by former Bank of Ireland communications chief Pat Farrell, IIP represents a number of large institutional investors in Irish property, including listed housebuilders Cairn Homes and Glenveagh Properties, and build-to-rent investors Ires and Kennedy Wilson.

Other members are Dalata, Ireland's largest hotel chain; US property group Hines; UK commercial property company Hammerson; pan-European retail manager Multi; and the Irish-listed reits Green and Hibernia.