Tadgh McNally: Budget 2027 leaves renters behind 

The rationale for Help to Buy has always been that it is a housing activation measure just as much as it is a financial subvention for first-time buyers, which is why it cannot be used for second-hand properties. File picture 

Last year the Government came under fire for a housing budget that primarily aided developers, and a similar charge may be levied at it this year as it presses through changes to its Help to Buy scheme.

The centrepiece of the change is a move to hike the tax refund available through Help to Buy by €5,000. Renters might feel more shortchanged with small adjustments to the rent tax credit and tweaks to rent a room.

The Help to Buy changes bring the tax clawback to a grand total of €35,000, with finance minister Simon Harris arguing it will let first-time buyers “get more of their own money back while they are buying their first property”.

Some may criticise this change as essentially providing a further €5,000 as a direct subsidy to housing developers, rather than being just an aid to first-time buyers looking to get on the property ladder.

The rationale for Help to Buy has always been that it is a housing activation measure just as much as it is a financial subvention for first-time buyers, which is why it cannot be used for second-hand properties.

Housing minister James Browne said the Government’s supports are as much linked to driving supply as helping with affordability.

While these sorts of supports are welcome for people seeking to buy their first home, it might stick in the craw of those first-time buyers who don’t see the opportunity to buy a new build home on the horizon.

For many, particularly in Dublin, new build houses that come in below the €500,000 price limit are few and far between, leaving prospective buyers unable to access key supports like Help to Buy.

This is why there was such a significant push from within parts of the Coalition for a move to abolish stamp duty for first-time buyers, which did not get over the line.

The proposal, first mooted by Fianna Fáil TD Seamus McGrath, did find support from his wider party, with Taoiseach Micheál Martin taking it up.

However, Mr Harris spent the weeks on the run into the budget ruling out the measure, and so it came to pass on Wednesday.

It wouldn’t have saved people as much as any moves on Help to Buy, with stamp duty only being charged at a rate of 1% on the house purchase price.

But it would be something to assist those second-hand homebuyers who don’t see Help to Buy as support they can receive.

Mr Browne said he wasn’t disappointed to see the measure omitted from the overall package, saying his focus is on delivering some support for first-time buyers through Help to Buy.

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Perhaps this was simply the trade-off Mr Browne was willing to accept to get the first hike to Help to Buy since 2020.

Another change announced by the Government which needs to be looked at under the microscope is its decision to hike the tax-free rent threshold for the rent a room scheme from €14,000 to €16,000.

While ministers might argue this could incentivise more people to rent out rooms in their houses, it may have the concurrent effect of hiking the rents of those who do live with their landlords, or in their gardens in modular homes.

With the possible max rent chargeable (€1,333) for a room in a house on a par with the median mortgage repayment (€1,400) in 2024, people might wonder who is really getting the better deal – renters or landlords.

With just a €150 increase in the rent tax credit, the Government has sought to please everyone and in the process have pleased no one.