Coalition considering package to help home buyers

The construction industry says the Coalition is considering bringing in a British-style home purchase help package for first-time buyers which would see the Government fund 20% of mortgages.

Finance Minister Michael Noonan met construction industry chiefs yesterday about the budget as well as groups representing farmers, trade unions, and employers.

After meeting Mr Noonan at Government Buildings, Construction Industry Federation director general Tom Parlon said an equity share scheme would help people to buy homes.

“The details of it are all there, we’ve proposed it to the Department of Finance, where the Government takes an equity share in the home for five years, to allow the first-time buyer to be able to buy it at the outset,” he said.

Mr Parlon said the Government could supply an interest-free home help grant for the first five years. If the price of the home increases, the value of the State’s equity would, he said.

“It’s a good investment for the State.”

Ministers have said they are considering some kind of grant to help buyers overcome new central bank rules which require buyers to have significant deposits, up to 20% in cases.

However, Mr Noonan’s spokesman said no decision on mortgage supports had been made yet but that options, including the CIF’s, were being considered. The spokesman also said the finance minister gets, on average, some 1,000 submissions ahead of the budget.

Environment Minister Alan Kelly has said a “significant” housing package is being worked on for the budget. However, as the election looms, international think-tank OECD this week also warned about State subsidies for buyers which could cause a further spike in house prices.

The CIF also wants a lower and temporary Vat rate of 9% for residential construction for a two-year period and reduced building costs, including lower development levies. The group claim the construction of 10,000 new homes would create an extra 25,000 jobs.

Elsewhere, employers group Ibec met Mr Noonan and stressed the need for investment in infrastructure and the need to remove people from paying the higher rate of tax. The group wants budget as well as capital funds spent on roads, school and house-building and broadband.

The Irish Farmers Association also met Mr Noonan yesterday and detailed proposals for a farm transfer incentive scheme as well as an earned income tax credit for self-employed workers.


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