Well-off home buyers look set to be locked out help-to-buy scheme as part of Budget 2020

Well-off home buyers look set to be locked out of the help-to-buy scheme as part of Budget 2020.

Last-minute negotiations around spending for next year are also focused on preventing a backlash over carbon tax rises with remedies for fuel poverty, particularly in rural areas.

The measures will form part of Finance Minister Paschal Donohoe’s budget tomorrow, which will have a €900m no-deal Brexit contingency package at its centre to protect jobs.

Talks at Government Buildings and Mr Donohoe’s department continued into last night, with Fianna Fáil and coalition partners, the Independent Alliance, pressing their demands.

Taoiseach Leo Varadkar, speaking at a Fine Gael dinner on Saturday, revealed that the help-to-buy scheme, which assists thousands of people with a deposit to purchase a home, will continue but with changes.

“Ten thousand people so far have been helped to buy their first home through the help-to-buy scheme,” he said. “It is our intention that it will continue. But what we are working on is some modifications to it — to make sure that it is actually helping young couples to buy rather than subsidising couples who can already well afford to buy.”

Currently, the scheme allows buyers draw down a maximum €20,000 for homes costing up to €500,000.

However, a recent Parliamentary Budget Office paper raised concerns that the scheme is priced too generously. Four in 10 claimants could come up with deposit amounts without aid.

Furthermore, a fifth of properties acquired through the scheme cost over €375,000.

While there are suggestions a cap for prices in the scheme could be lowered, sources in housing last night said changes had yet to be made. Fianna Fáil was also pushing back against any adjustments. Nonetheless, Mr Varadkar’s spokesman said his remarks reflected where the Government was in its budget plans.

Other elements in tomorrow’s budget are expected to include:

• A €6 rise in carbon taxes, netting the Government €100m and helping to fund climate actions. Hauliers and homes with bad heating systems may escape the hike;
• Targeted increases for some welfare payments, including the living alone allowance and qualified child payment;
• No increases in the State pension and jobseekers allowance;
• Modest tax cuts for those on the minimum wage with a tweaking of USC thresholds;
• An estimated €900m Brexit package to protect jobs in agriculture, tourism, and food;
• Free GP care for the under eights, free dental care for children under six, and reductions in prescription charges for the over 70s;
• Funding to recruit an estimated 600 extra gardaí.

A worry among ministers is that the modest carbon tax rises, which will likely add over €1 to a full tank of petrol, may hit poorer households or rural areas. Independent Alliance members were last night trying to negotiate protections from fuel hikes for rural dwellers as well as a rebate for hauliers.

Speaking about the Brexit package, Mr Varadkar said: “The components will involve a financial package to save jobs and businesses that are viable in the long term but may be vulnerable as a consequence of Brexit.”

Agriculture, food producers, fisheries, exporters to the UK, and the tourism industry would be most protected, said the Taoiseach, adding: “We will have to have a focus on the border region which could be very much affected too.”

More funds are also expected to be announced for the IDA, Enterprise Ireland, and Revenue as the country prepares for Brexit.

Meanwhile, hopes are growing that an alternative Brexit deal can be agreed.

Mr Varadkar is set to meet Boris Johnson this week, and there are signs the British prime minister may compromise on his alternative plan to the backstop.