THE HELP-TO-BUY SCHEME has been extended for another four years, while the rate of stamp duty for high-value homes is set to increase.
Other measures confirmed in today’s Budget include an attempted resolution to the residential land tax dispute and an increase in the tax for companies which bulk-buy new housing estates.
The help-to-buy scheme was scheduled to remain on the books until December 2025, but has been extended in today’s Budget until 2029.
It applies for newly-built house or apartments and can also be applied for if buying a once-off self-build home.
The tax rebate provides up to 10% of the price of the new build.It only applies to properties that cost €500,000 or less.
“Ensuring people have access to home ownership is a key priority for this government,” Finance Minister Jack Chambers told the Dáil today.
He said the scheme has supported around 50,000 individuals and couples to buy their own home and that the extension would give future buyers “certainty”.
However, property specialists Savills said that while it welcomed the government’s extension of the help-to-buy scheme, until 2029, it said there was a “missed opportunity” in not raising the €500,000 threshold for property values in Dublin.
The group had proposed raising the threshold to €614,000 in Dublin.
Reacting to the Budget, Savills said the current threshold has resulted in first-time buyers being faced with “limited options” as it said “only a small percentage” of new developments in the capital are eligible for the scheme.
Rising construction costs and consumer inflation mean the current threshold “no longer reflects the realities of today’s housing market, particularly in high-demand areas”, Savills added.
Criticism from housing charityThe Simon Communities of Ireland said that it was “extraordinary that so much money could be expended and yet, so little done for those at the sharpest end of the housing crisis” in the Budget.
Wayne Stanley, executive director of the charity, said that it welcomed the vacant homes tax being increased from five to seven times the property’s existing base Local Property Tax rate.
However, Stanley said he was concerned that it is “insufficient” to drive change.
“Similarly, the increase in social welfare rate will be welcomed by those receiving them, but we know that it is not a sufficient buffer to work as a protection to low-income households to prevent homelessness,” he said.
Stanley added that the State needs to be working towards delivering 15,000 social homes a year and that the charity had proposed ways to fund the development of 12,500 social homes to move us closer to the target of 15,000,” he said.
But instead, the Budget will see the State “stay the course” with allocation for 10,000 social homes.
“This is simply insufficient and we see another budget where the rhetoric of homelessness being a ‘top priority’ is not in evidence,” Stanley said.
Stamp Duty riseThe rate of stamp duty applicable to residential property valued above €1.5 million will increase to 6% with effect from midnight tonight.
The existing rate of 1% will continue to apply to properties valued up to €1 million, and 2% will apply on values over €1 million.
A third rate of 6% to apply to any property valued in excess of €1.5 million.
Bulk-buying estatesThe higher rate of stamp duty on bulk acquisitions of houses will increase from 10% to 15% with immediate effect.
However, the Social Democrats has criticised the rise as “tokenistic”, calling it a sign that the Government is “unwilling to actually stand up to” investment funds who are often behind the purchases.
“Last year alone, the number of homes bought in bulk increased by 58 per cent. Clearly, investment funds are more than happy to fork out the extra stamp duty to buy up homes,” the party’s housing spokesperson Cian O’Callaghan said.
He said an increase to 100 per cent would act as an “effective ban” on the practice.
“This is not an extreme measure. Allowing existing homes to be bought in bulk drives up house prices, locks out first-time buyers and adds nothing to our overall housing stock,” O’Callaghan said.
Land tax disputeThe government has also sought to bring a resolution to the dispute around the Residential Zoned Land Tax.
From 2025, landowners will be able to avail for an exemption of Residential Zoned Land Tax if they wish for their land to be rezoned to reflect the activity they carry out on their land.
There had been a dispute between the Green Party – which regularly called it a tax against land hoarding – and its coalition partners over whether to defer the tax for a year to allow farmers time to prepare.
Another crucial step to address the housing crisis.
Going ahead with the land hoarding tax is essential for new homes to be built on land that is already zoned for residential use, with the right exemptions for land being actively farmed.#Budget2025 #GreensInGovernment pic.twitter.com/4tpgOe7OiW
Residential Zoned Land Tax is targeted at unused land, which has been zoned or classified as a site for housing.
The tax would include mixed-land sites, where other services may also be built on the site, and the rate is set at 3% of the land’s market value.
In its announcement today, the government confirmed that from From 2025, landowners will be able to avail for an exemption of Residential Zoned Land Tax if they wish for their land to be rezoned to reflect the activity they carry out on their land.