Fianna Fáil wants changes to first-time buyer scheme

Fianna Fáil is to put pressure on Government ministers to vote in favour of changing their own first-time buyers scheme.

The main opposition party is now seeking the support of the Independent Alliance when they table amendments the new first-time buyers scheme.

Fianna Fáil housing spokesman Barry Cowen yesterday said: “I will be asking the Independent Alliance to support the amendments we table, in particular we will be asking them to back our amendment to lower the ceiling to €400,000.”

The tax rebate announced as part of the budget will allow first-time buyers to claim up to €20,000 back on a new home. Buyers can claim back 5% of the price of a €400,000 and above that the rebate will be capped at €20,000, however those who purchase homes up to the value of €600,000 will all be eligible for the scheme.

Housing Minister Simon Coveney yesterday defended the €600,000 ceiling by saying he didn’t want to create a “cliff effect”.

“If someone was buying a house for €405,000 we didn’t want them to get nothing, yet a person buying a house for €400,000 would get support from the State to the tune of €20,000. So that’s why we effectively stopped the benefit at €400,000 and then the benefit is frozen beyond that up to €600,000. But we don’t expect first-time buyers will be buying houses at above €400,000 in any numbers.”

Mr Coveney said that in total first-time buyers bought 760 homes across the country last year.

“Builders simply aren’t building homes for that sector. And we need to change that.”

But Sinn Féin’s Eoin Ó Broin said the incentive would only push up prices and called on them to withdraw the scheme.

“If Mr Coveney is going to press ahead, he needs to outline how he’s going to monitor house prices over the next 12 to 18 months, and if there’s any evidence of house price inflation — as we believe there is going to be — then he needs to suspend the scheme.”

He said the Oireachtas housing committee had spent a “lot of time” speaking with experts on the issues but this work had been “ignored” by Mr Coveney.

“In general our view was that we needed to see the price of house reduce, rather than schemes to increase access to credit,” said Mr Ó Broin. “What we proposed back in June was that the Housing Agency be given a task of doing an annual audit of the all-in cost of providing residential units, and within three months — and that would have been in time for the budget — to make clear policy recommendations based on evidence and international best practice, as how to reduce those costs.”