What is the Help to Buy Incentive?

The Help to Buy incentive is a program from the Irish Government that provides relief to first time buyers of a new home or apartment. The amount of relief granted through this incentive was recently increased due to economic pressures brought on by the Covid 19 pandemic. In the July 2020 Jobs stimulus package, the Government increased the amount of relief available temporarily through 31 December 2020. With the passing of Budget 2021, this increased relief has been extended to 31 December 2021. The incentive gives a refund of income tax and Deposit Interest Retention tax (DIRT) paid in Ireland over the previous 4 years to qualifying first time buyers.

Help to Buy only applies to properties worth less than €500,000, and the home or apartment must be new or self built. To qualify for Help to Buy, you must be a first time buyer who either buys or self-builds a new residential property between 19 July 2016 and 31 December 2021. However, the Help to Buy scheme does not apply to rental or investment properties. The scheme is limited …

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Help To Buy For First Time Buyers

The name provides a definition for itself. First time home buyers are people in the market buying a home for the first time. Compared to other home buyers, such as trader-up borrowers and mortgage switchers, first time buyers have different benefits and restrictions when borrowing than other borrowers. The Central Bank of Ireland requires a 10% down payment for first time buyers. Now, for first time buyers, a 45,000 euro down payment for a 450,000 euro home may be somewhat daunting. However, the Central Bank has offered assistance for their first time buyers to keep them in the market. The Central Bank offers a help to buy program. This benefit allows for first time buyers of new houses and apartments to take a 5% tax rebate off of properties less than 500,000 euros. In a recent case at Irish Mortgage Brokers, a married couple came looking for a mortgage on their first home. The couple did not have a home in mind at the time, but based on their income, the couple had roughly below 500k to spend. Both individuals …

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Is the Housing Gap Increasing?

With an attempt to lift the housing market out of the current crisis it’s in, the Irish government is left to answer one very important question. Is the Help to Buy scheme even helping?

Or…is it worsening the gap of the home hunters who are looking for the ability to buy?

As what is already well known, house prices are soaring. Without the supply of housing increasing at any fast rate, this will continue to be the case.

Therefore, home prices are continuing to rise, much faster than incomes are rising, and the gap between available homes and affordable homes is continuing to worsen.

When looking at reports from CSO, the average wage in Ireland is €45,075 for a full-time employee. That number is, however, much lower as a median, where most of the working class clusters. The median is found at €28,500. A drastic difference and even more of a surprise when finding that, that means, nearly half the population is below that number.

This is where the Help to Buy scheme comes into play.

Introduced just earlier this …

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Intriguing Statistics of First-Time Buyers

Perfect Property has recently found success in finding the common budget of the average house hunter in Dublin.

While in such a crisis, this is information that has been found is essentially vital in understanding a piece to the puzzle of what keeps buyers from buying.

Of course, there are statistics on the shortage of homes compared to the increasing demand, a factor into understanding the crisis that is just as vital.

According to Perfect Property, a relatively new search engine, the average Dublin house hunter has a budget of €315,000 to purchase a home with.

A pretty substantial budget for any home buyer, however, we are still observing a vast amount of first-time buyers applying for the new state mortgage scheme, introduced just a few months prior.

A scheme that was expected to cover nearly 1,000 loans and last for an extended period of time is now lucky if it lasts the full year.

Of course, when looking in the Dublin area it can be expected that the budget for a home will …

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Start-up to Cause Shift in Housing Market

As I have previously written, the Irish housing market is currently experiencing a great crisis. With nearly no answers, the public is scrambling to find a way out, a way to the surface of all this financial distress.

This is where the Irish start-up Moove comes into play.

They’re entering the market with a goal to disrupt the market and give buyers and seller more choices and control during the sale of a home.

Yet to fully enter the Irish market, they are basing and forecasting the success of their business on the hybrid online model, currently based in the UK.

This model is currently offering sellers savings up to 7,200 euro!

Founder of Moove, David Madden started his career at the age of 17 as an estate agent at his parent’s business.

Having worked in the real estate business for many years, he has great potential in the start-up of such an inventive company.

Moove is designed to provide the same services one would find from a regular real estate agent, starting at a base cost of 1,800 euro.

…

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Mortgage update on the UK: First-time buyers average deposit is rising

In the UK, the average price for their first-home has hit a record high at £207,693. As well as nearly half of all buyers of homes are first-time buyers. Within the first six months of 2017, the number of first-time buyers are at 162,704. This is only 15 percent below the peak of 2006.

On average £33,000 are needed for deposits for first-time buyers.

London we see even worse housing increases at an average deposit for first-time buyers at £106,577.

Northern Ireland is hitting the lowest spot at an average of £16,457 of deposits, Wales at £17,193, and Scotland £21,565.

Like our Help-to-Buy scheme in Ireland with tax rebates of up to 20,000 euro, the UK has a program similar. Their Help-to-Buy scheme with the low mortgage rates gave first-time buyers a push to buy. That could …

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Rents continue to increase over the year by substantial amount

In reference to Irish private sector rents grew by 7.37% from 1st quarter 2016 to 1st quarter 2017 by Robert McHugh on 15 June 2017 in Business World.

Over the course of only a year, the average rent increased by 7.37% from 1st quarter 2016 to 1st quarter 2017. The standardised average national rent being €987, Dublin is one of the highest amongst the other counties as well as Cork and Galway. Looking over the houses and apartments market the trend of rents are continuing to grow.

Outside the Dublin county, the houses and apartment rents at a overall growth rate of 1.3% in private sector rents. Annual growth increased by 7.6% in houses and apartments. The margin is shrinking between the peak of 2007 and the 2017 first quarter however, it is still 8% below.

So far the 19 Rent Pressure Zones (RBZ) are located in parts of the following counties: Dublin, Cork, Galway, Meath. No other parts of the country are currently able to become Rent Pressure Zones, according the to latest Rent Index.

Mr. Simon Coveney, …

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Help-to-buy incentive under scrutiny

This past Sunday, current Housing Minister Eoghan Murphy said on RTE’s The Week in Politics that the Help-to-Buy initiative introduced by his predecessor is currently under review. Since its introduction in January under former Finance Minister Michael Noonan and former Housing Minister Simon Coveney, the Help-to-Buy initiative has already received nearly 7,000 applicants and has successfully helped a great percentage of them with the purchase or building of their first home. However, the initiative has recently come under fire for exacerbating the problems it intended to solve, and there is speculation that it may be dissolved.

 

The purpose of the Help-to-Buy incentive was to encourage first buyers to enter the market by helping applicants with their deposit through the refund of applicants’ income tax and DIRT other the past 4 years. It applies to first time buyers who either purchase or build new residential properties, and allows them to receive 5% of the purchase price of their new home, with an upward limit of €20,000. It is hoped that the incentive would help more people climb the property ladder, …

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First experience with ‘Help to Buy’

We are currently undergoing our first experience with a client who wants to use ‘Help to Buy’ and the same issue has arisen at two different banks so we are comfortable that it is probably a teething issue that is live and current.

The problem is that the banks are telling us they need proof the person will qualify for the HTB scheme, but to qualify you have to have a signed contract, no borrower is going to sign a contract unless the bank will advance the loan factoring in the HTB because otherwise they may not be able to complete the loan.

The lenders had forewarned us that there would be problems, but this one seems very basic. They could just make the offer contingent on the person qualifying for the scheme. Otherwise it will mean that people are stuck waiting for the contractors name to show up on what is so far a very short list, and they are also putting the kart before the horse in terms of how it was meant to operate.

For now all …

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First time buyers who don’t buy new homes

First time buyers have been asking ‘what about those of us who are not buying a new home? Why don’t we get any help like the people using help to buy?’. The answer is that you do, at least for the remainder of 2017.

There is still a DIRT relief for first time buyers scheme in action, it started in 2014 and is ongoing until the 31st of December.

The scheme doesn’t help you get a deposit, rather it’s a refund after you buy, see the notes below taken from the Revenue.ie website:

Section 266A of the Taxes Consolidation Act 1997 provides for refunds of Deposit Interest Retention Tax (DIRT) for first-time buyers who purchase a house or apartment to live in as their home. It also applies to first time buyers who self-build a home to live in.

Who can claim it?

A first-time buyer of a house or apartment who purchases or self-builds a property between 14 October 2014 and 31 December 2017 may be entitled to claim a refund of DIRT.

The first-time buyer must not have …

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