Changes to new first-time buyers grant scheme urged

The new first-time buyers grant has been criticised as a “mansion grant” which will be available to those earning four times the average industrial wage.

Fianna Fáil will push for amendments to the housing bill as they claim the grant is simply a “blank cheque” for developers and will only push prices up.

The Government was accused in the Dáil yesterday of creating a “help-to-sell scheme” for builders which has been dressed up as a help-to-buy scheme.

Describing the incentive as a “mansion grant” Fianna Fáil’s housing spokesman Barry Cowenpointed out the €600,000 limit is “completely out of sync with the reality of an ordinary first-time buyer”.

He told the Dáil the average cost of providing a three-bed semi-detached home of 113sq m in the greater Dublin area is €330,493. “For a new home worth €600,000 this requires a €98,000 deposit and an income of at least €145,000. This is four times the average industrial wage.

“A couple earning this level starting out in life does not need €20,000 from a State struggling to tackle a social housing waiting list of 130,000 homes.

“It means ordinary tax-payers are directly subsidising people earning four times the average wage to buy a home worth three times the national average price of thee bed semi–d.”

Fianna Fáil will now put pressure on the Government to bring down the maximum home value that people can claim on to €400,000.

“I hope that the minister is willing to engage in meaningful discussion over how we can at the very least improve the scheme,” Mr Cowen said.

This was echoed by Social Democrat, Róisín Shortall, who said in the Dáil: “If it costs €600,000, it is not a starter home.”

Fianna Fáil’s Darragh O’Brien asked Minister Richard Bruton, who was taking Leaders Questions in the Dáil, to give a commitment that he is confident the initiative will not lead to house prices throughout the country increasing further.

Responding, Mr Bruton said the Government recognises that there is a housing supply problem. But he said the first-time buyers tax rebate of up to €20,00 would “effectively, be immediately reckonable towards the deposit requirement” set down by the Central Bank.

“This will immediately help more young people to get into the starter market.”

Sinn Féin’s Eoin Ó Broin called on Housing Minister Simon Coveney to rethink his help-to-buy scheme.

“Before the minister pressed ahead with the launch of this scheme the overwhelming majority of expert opinion told him that this scheme wouldn’t work and that it would, in fact, make the housing situation worse.

“Minister Coveney must now provide more detail on how he intends to monitor the impact of the scheme and if evidence emerges that developers are increasing prices due to the scheme he must give a commitment to scrap it.”