Government could reap €25m under first-time buyers VAT rebate proposal

THE Government could rake in over €25 million with the introduction of an initiative for first-time buyers.

Property consultants Savills Ireland said that unlike second-hand houses, 13.5% of the sale price of a new home is paid in VAT. This compares with a zero VAT rate on new homes in Britain. A house priced at €250,000 will come with a VAT bill of €33,750.

Savills is suggesting that first-time buyers should be allowed to reclaim three-quarters of that VAT on completion of their sale, adding that this would have an immediate, positive impact.