‘Help-to-buy’ scheme threshold to be cut to €400k

The Government is to table significant amendments to its proposed income tax rebate for first-time buyers after concerns were raised by the Central Bank.

The Irish Examiner has confirmed Finance Minister Michael Noonan secured cabinet approval to reduce the threshold

from its budget day limit of homes to the value of €600,000.

The original threshold had been criticised as a “mansion grant” by Fianna Fáil.

The concerns raised by the Central Bank, including that that the scheme could encourage buyers to take on too much mortgage debt, will be addressed in the Finance Bill, to be published today .

However, any changes to the thresholds are likely to be made at a future date, expected to be when the bill is at committee stage.

The “help-to-buy” plans propose a rebate of income tax paid over the previous four years. The rebate will be worth up to 5% o f the price of a home to a value of €400,000, allowing for a maximum rebate of €20,000.

However, the initial plans outlined that first-time buyers of homes up to €600,000 would also be entitled to the rebate, although it would be capped at €20,000.

Fianna Fáil’s housing spokesman Barry Cowen wants the entire scheme capped at €400,000

Meanwhile, Public Expenditure Minister Paschal Donohoe has called for Sinn Féin TDs to relinquish large portions of their Dáil salaries back to the taxpayer, rather than keeping it for the party. He locked horns with opposition members in the Dáil over pay for TDs.

In one key exchange with Waterford TD David Cullinane, the minister defended the pay rises for TDs due to kick in next year while informing the Dáil that ministers are to forgo their increases.

“You will be aware that yesterday the Cabinet made a decision that officers would forfeit the restoration that is due under Lansdowne Road. That was made to reaffirm the decision of the last government in recognition of the challenges facing this country,” he said.

“Anyone who is privileged to be in government is acutely aware, and we made the decision and [it] is the right decision,” he added.

Addressing Mr Cullinane, he said: “I might ask the deputy to clarify the policy of Sinn Féin. For a time I have heard his party say you should only be paid the average industrial wage. Would you clarify is that still the case and if it is and what is the amount of money? Will you sign a waiver form and relinquish your wages back to the exchequer?”

Mr Cullinane described Mr Donohoe’s question as a red-herring, saying there was no legitimate reason for TDs’ pay to be increased.

“I take the average industrial wage and I employ someone. I pay them €300 a week, I have taken them off the Live Register. That comes out of my salary. I welcome that office holders have forgone increases, but logic follows the same should happen to TDs. Why then should TDs get pay restoration?” he said. “We are very well paid I am sure you will accept that. Those under €65,000 are not seeing pay restoration. This is an issue of fairness.”

Mr Cullinane said a public sector worker on an average salary of between €35,000 and €40,000 per annum will receive a €1,000 increase or restoration, yet those who are on over €65,000, including Members of the House, will receive a minimum of 8%, which is a total of €5,400. That is an increase of over €100 per week, he said.

Mr Donohoe engaged in robust criticism of Anti-Austerity Alliance TDs Paul Murphy and Bríd Smith.

“It is on the deputy’s ideological agenda never to acknowledge progress on any matter, let alone that this is happening through constructive and progressive engagement between reasonable leaders in the union movement and a Government that is doing its best to make progress on areas with the resources available to it,” he said to Mr Murphy.