Taoiseach Leo Varadkar has said he would be “disinclined” to support demands from his party colleagues to extend the Help to Buy scheme to second-hand homes.
He has said, however, the Government wants to find ways to give these buyers a “bit of a leg up” and would be open to exploring whether the First Homes shared equity scheme could be extended to those buying homes that are not newly built.
Mr Varadkar also said that he supports an upward revision of the Coalition’s housing targets and that Minister for Housing, Darragh O’Brien, will bring plans to Cabinet around this.
A number of Fine Gael politicians have in recent weeks called for the State’s Help to Buy scheme to be expanded to properties that are not new. The scheme is a tax refund of up to 10 per cent of the purchase price or €30,000, whichever is lower. This can help buyers get over the deposit hurdle, though only for new homes and not second-hand properties.
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“If you were to extend it to second homes, it wouldn’t result in new homes being built. It might result in the price of second homes going up and there would be considerable cost to the exchequer. That’s why I’m disinclined to go for that, to be frank. One thing I’d be more well-disposed to would be seeing if we could extend the First Homes scheme to second-hand purchases. I think that is worthy of consideration. There might be a stronger case for doing that.”
“If you look at the number of first-time buyers, most first-time buyers buy a second-hand home. I think we need to think of ways as to how we can give them a bit of a leg up but while trying to avoid causing house prices to go up because they are at long last levelling off.”
Under the First Homes scheme, the State takes an equity stake of up to 30 per cent – or typically up to 20 per cent for those also accessing the Help-to-Buy Scheme. To qualify, buyers must take out the maximum mortgage of four times their income. The scheme does involve some restrictions on homeowners and an obligation to pay a service charge, based on the equity stake, after year six. It opened in the middle of last year and to date, 1,700 applications have been made, with an average value of close to €70,000 – a sum which would significantly increase options for buyers who qualify.
Speaking about the potential upward revision of yearly housing targets, Mr Varadkar said he will favour this.
“It involves both advice from the housing commission and also from ESRI as to whether we should revise our home building targets upwards. I think we should. I think we should aim to get to 40,000 sooner before the end of the decade and then go beyond 40,000.” He said this could result in more lands being zoned.
