Tax credits sought to replace house-buying grant

The Government has been urged to introduce tax credits in next month's Budget for first-time home-buyers to help soften the blow from the abolition of the first-time buyers' grant.

The call has come from the Institute of Professional Auctioneers and Valuers (IPAV) which last night said it "greatly regretted" the abolition of the grant.

IPAV spokesman Mr Martin O'Mahony said thousands of young people who are either in the process of buying a first home or planning to do so will be severely hit by the abolition of the grant.

"Many such buyers often use the €3,800 grant as part of their down payment and consequently are now in severe financial difficulty as, in many cases, it could take years for them to save this amount of money," h e said.

"As a result of this recent measure, many people may have to cancel their proposed purchases and have their deposits returned. We feel this move is most unfair and discriminatory to a very vulnerable section of the population," Mr Martin added.

The IPAV said if the Government was serious about helping first-time buyers it would introduce tax credits in the Budget.

It is proposing the credits be made available to first-time buyers for a period of between three to five years.

The institute believes there is a now a "grave imbalance" in the amount of money taken by the Exchequer in VAT on new houses and stamp duty and the abolition of the first-time buyers' grant.

The most recent figures available reveal the Exchequer received €912 million in VAT alone on new houses last year while €38.7 million was paid out in first-time buyers' grants during the same period.