First-time home buyer scheme to be extended, with price ceilings rising

The new price ceilings will mean buyers in Limerick will be able to avail of the support for houses costing up to €425,000, while those in Kerry and Tipperary can avail of the support on properties up to €350,000.

The Government’s shared equity scheme for first-time buyers has been extended, with the price ceiling going up in 14 counties from Monday.

All new homes in Ireland worth up to €350,000 are now eligible for the scheme, irrespective of location, with price ceilings of €500,000 in areas of greatest demand.

More than 4,000 buyers in 25 counties have been approved under the scheme to date, with 1,517 using it to purchase a property.

The new price ceilings will mean buyers in Limerick will be able to avail of the support for houses costing up to €425,000, while those in Kerry and Tipperary can avail of the support on properties up to €350,000.

Currently, in Cork City, the ceiling is set at €475,000 for new houses, while due to the additional costs associated with the construction and delivery of apartments, the price ceiling for apartments in Cork is higher, at €500,000.

“Our price ceilings aim to get the balance right between encouraging usage of the scheme, promoting housing supply and avoiding price distortion in local housing markets,” said First Home Scheme chief executive Michael Broderick.

Under the €480m scheme, financial support is given to prospective owners to “bridge the gap” between what they can afford and what the cost of the home is. It provides a maximum of 30% of the purchase price in exchange for the State taking an equity stake in the property.

So far, the average purchase price for homes under the scheme has been €379,000, with the average support being given standing at €67,000.

Three-quarters of approvals have been given in the counties with the highest housing costs such as Dublin, Cork, Kildare, Meath and Wicklow.

It has been claimed the Government’s schemes for new homes have helped to fuel recent property price inflation for new builds.

In April 2024, the average price of a new home sold in Ireland stood at €454,000. In the same month two years prior, it was €400,000. And, in April 2020, the average new home in Ireland sold for €368,854.

The Government has consistently defended both Help to Buy and the First Home Scheme as supporting people to purchase their first home.

However, the independent Parliamentary Budget Office said in 2022 that Help to Buy was fuelling property price inflation. Separately, a recent report commissioned by the First Home Scheme and compiled by KPMG said there was no evidence to suggest it was contributing to inflation.

But KPMG also found the scheme needed to be monitored to ensure it was not contributing to inflation.