Just 31 builders and contractors have so far been signed up to the Government’s new help-to-buy scheme.
The scheme is designed to assist first-time buyers with obtaining the deposit required to purchase or self-build a new house or apartment as their residence.
The incentive provides for a refund of income tax and Deposit Interest Retention Tax (Dirt) paid over the previous four tax years to those first-time buyers. It is up to a maximum amount of €20,000, depending on the value of the property.
In order for claims to be processed, the developer or builder of the home has to be registered with Revenue under the help-to-buy scheme and first-time buyers are now being urged to check their builder is fully registered.
However, according to figures provided by the Department of Finance, as of February 3, just 31 such contractors had been fully approved out of a total of 114 applications. The statistics were revealed by Finance Minister Michael Noonan in response to a query from Fianna Fáil TD John Curran.
Mr Curran said he had raised the issue after one of his Dublin Mid-West constituents found that while they had their tax affairs in order, they were ineligible for the rebate as their developer was not registered with Revenue for the scheme.
“First-time buyers need to be aware of who is or is not registered with Revenue,” Mr Curran said.
Applications from first-time buyers for the financial support opened at the start of January, but anyone who bought a newly built first home since last July 19 is eligible to apply for the rebate.
Earlier this week, Mr Noonan confirmed in a parliamentary question that, as of February 3, there had been 2,196 help-to-buy applications, of which only 432 had been successful and 1,764 were still pending.
Mr Noonan said that, given the number of queries it has received from contractors, “Revenue anticipates that the number of approved contractors will continue to increase over the coming weeks”.
The Construction Industry Federation (CIF) insisted there is strong demand among house-builders and contractors to register for the scheme.
“The CIF recently hosted an event with Revenue on how companies can become registered contractors and it was attended by over 100 construction companies,” said Tom Parlon, CIF director general. “We are now putting on regional events on the same topic. So the demand to be a registered contractor is strong amongst those house-builders, particularly in the Dublin and Cork regions where activity is picking up more strongly.
“Many of the attendees at the event would have multiple sites with potentially hundreds of homes being built. We’re confident that the numbers registering will continue to grow over the coming months.
“Every month, 2,000 new households are formed and most will be composed of two first-time buyers, but only around 250 starter homes are being completed. The gap between the two has been growing at this rate for a number of years. In normally-functioning markets the proportion of starter homes is closer to 50%. Added to this, of the 38,000 houses, new and otherwise, sold in Ireland last year, only 2% were to first-time buyers.
“Based on these figures you can see what’s driving increasing rents, longer social housing lists and ultimately the new form of homelessness.”
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