Higher earning first-time buyers gain most from Help To Buy scheme

Higher-earning first-time buyers have benefitted the most from the Help-To-Buy (HTB) scheme over the past six years, according to new figures, as Minister for Housing Darragh O’Brien pushes to extend the support beyond its scheduled end next year.
The Central Bank said in a report published on Wednesday that the scheme, which offers tax rebates of up to €30,000 to first-time buyers, has been used by around 30 per cent of such borrowers over the period. It has cost Revenue €938 million as of the end of 2023.
The household income of HTB recipients was, on average, €15,500 above first-time buyers that did not avail of the subsidy, largely as they tended to buy more expensive homes.
The average €62,800 house price difference is likely down to the fact that the scheme only applies to new homes, which tend to be larger and have higher energy ratings than second-hand units on the market, it said.
The differential was lowest in Dublin, at €27,000, given the €500,000 price cap that applies to properties under the scheme.
The report comes as Mr O’Brien is known to be pushing, as one of his priorities for next week’s budget, for the HTB plan to be extended beyond 2025, well into the lifetime of the next government.
The current scheme is due to expire at the end of next year, and Sinn Féin has promised to dismantle the arrangement – which critics say is driving house prices up – if it gets into government following the next general election.
The Minister is said to be keen for the €500,000 cap, which has been in place since the scheme was first unveiled in 2016, to be increased in Budget 2025.
The Irish Times also reported earlier this month that Government officials are exploring expanding renters’ access to the scheme. The proposal, costed at €40 million, would allow renters to factor in previous rent payments when seeking the highest payout under the scheme, which is unlocked only if they have paid sufficient amounts of tax in recent years.
Such an expansion is seen as mainly benefiting lower-income earners who have not paid enough tax to get access to the maximum €30,000 subsidy available under the existing scheme.
The Central Bank report did not look into the effect the scheme has had on house prices or entry of borrowers into the market that would otherwise have come up against borrowing limits under rules brought in by the regulator in 2015.
In a pre-budget submission, estate agent Savills called for the threshold to be raised from €500,000 to €614,000 for homes in Dublin, citing increases in construction costs and consumer inflation since it was initiated. The estate agent also called for the scheme to run until December 2028.