First-time house buyers dominate questions on ‘Irish Times’ forum

Confusion over how the new first-time buyers incentive scheme will operate was a key concern among posters responding to The Irish Times post-budget "Ask the Experts" Q&A on Wednesday morning.

However, much of the detail of the scheme has yet to emerge, on the expectation that the forthcoming Finance Bill, to be published on October 20th, will provide the specifics such as how the rebate will be refunded.

Returning emigrants, many of whom may have paid little or no income tax in Ireland over the previous four years, are looking for answers as to how the scheme might apply to them.

One reader, who has been working full time for the last two years since returning from Australia, should be able to claim the rebate for the two years of income tax they have paid.

Other first-time buyers, who recently purchased a property, were disappointed to learn that as contracts were exchanged before the qualifying date of July 19th, 2016, they won’t qualify for the rebate. One reader completed the sale on a new house worth €410,000 and while the sale has only closed in the last six weeks, the contract was signed before July 19th, which means that they won’t qualify.

Another common query relates to the actual sale price of a new home – does this refer to the sale price used to calculate the mortgage, or is it the sale price shown on the property price register, which is the house price less builders VAT?

‘Ghost estates’

As Dominic Coyle of The Irish Times answered: "We're assuming the rebate will be based on the price inclusive of VAT because essentially that is what you are paying. However, as more details emerge on the scheme, that has yet to be confirmed."

Other queries related to new builds in so-called “ghost estates” – ie they were built some years ago but have never been occupied, but there is no official clarity on this as of yet.

For other first-time buyers, who have saved in excess of a 20 per cent deposit, the restriction on a mortgage of “at least” 80 per cent was a bone of contention.

“This seems very unfair, after saving to get a smaller mortgage,” noted one.

Others argued that the restriction of the rebate to new properties, on supply grounds, was inequitable.

“Can’t believe the housing grant/benefit is restricted to new builds. Two children here who waited patiently to see what the budget would bring to help them get on the property ladder. Neither can afford new builds and want to do up an old house – so many lie derelict – why does the Government not see this,” said one.

Questions on local property tax, a bugbear of landlords, were also raised, but there is no relief on this front as the budget did not assert that the tax is allowable as a deduction against tax liabilities.

State pension

The €5 increase to a range of benefits, including the State pension, maternity benefit and carer’s allowance, was also of interest to many, but some readers queried why payments such as maternity and illness benefit, are not eligible for the Christmas bonus, which will increase to 85 per cent this year.

Other readers were pleased that the Government has decided to upscale dental benefits by reintroducing an annual free scale and polish. Dental benefits will also be extended to the self-employed from March 2017.

Parents bemoaned the lack of an increase in child benefit, which rose to €140 last year, although this may be due to the new childcare scheme, which surprisingly, was not a source of many questions.

The self-employed also featured, and it was noted that they will be entitled to an increase in the annual earned tax credit from €550 to €950 from next year, while they will also benefit from a decrease in the USC rates (this would represent a saving of about €250 a year for a single person earning € 50,000).