Help-to-buy scheme extended in Budget 2021

Help-to-buy scheme extended in Budget 2021

The help-to-buy scheme for first time buyers was extended to the end of 2021 in the Budget on Tuesday.

The scheme helps first-time buyers with the deposit needed to buy or build a new house or apartment with relief of the lower of 10% of the value of the property or €30,000 available.

Public Expenditure Minister Michael McGrath signalled what he termed a “radical reappraisal on how we deliver housing.” in his Budget 2021 speech.

Announcing a record level of funding for the Department of Housing – an increase of €773 million on last year – he said the Government will place a “much greater emphasis on building social and affordable housing.”

He said his policy will deliver 9,500 social homes next year.

The Stamp Duty Residential Development Refund Scheme due to expire on 31 December 2021 will also be extended to operations commenced by 31 December 2022.

Stamp Duty Residential Development Refund Scheme provides for refund of a portion of the Stamp Duty paid on the acquisition of non-residential land where that land is subsequently developed for residential purposes.

Minister for Finance Paschal Donohoe said that due to the impact on the sector of Covid-19, and also to certain issues that have been brought to his attention since its introduction, he is to make a number of changes to it this year.

Apart from the extension to the expiration date, the time allowed between commencement and completion of a qualifying project is being extended by six months to two-and-a-half years.

Michael McGrath allocated €110m for affordable housing and cost rental schemes in Budget 2021.

Announcing the funding, the Minister said that thousands of people find themselves locked out of the property market due to high rents.

He announced a total of €5.2 billion to the Department of Housing, Local Government and Heritage next year.

Mr McGrath said that an extra €500m would facilitate the construction of 9,500 new social housing units in 2021 and a total of 12,750 units will be added to the social housing stock.

He said there would be €65m to fund deep retrofitting of social housing stock.

Minister McGrath promised an additional €22m to support homelessness programmes and the introduction of a cold weather initiative.

He said a basic need in life is to have secure place to live and he said that for too many people in Ireland that need remains unfulfilled.

Tackling homelessness was a top priority for Government, he said.

Minister McGrath said that the country was able to deliver public housing when it was much poorer than it is today, and he said they would do this again.

He said the Land Development Agency would play an important role in the Government’s affordable housing strategy into the future.

The Minister said that the agency would have over €1.2bn of funding to progress the range of projects already under way.

Responding to the Budget 2021 announcement, Dr David Duffy, Director of Property Industry Ireland (PII), the Ibec group for businesses working in the property sector, said: “Property Industry Ireland welcomes the commitment in the Budget to housing and capital spending.

“The reference by Minister McGrath that the housing crisis will be solved through both public and private delivery of housing is positive. PII also welcomes the announcement of an Affordable Purchase Shared Equity Scheme for first time buyers.

“While the budget allocated will mean that it will have limited impact on making more homes available, PII is ready to engage with the Department of Housing on the structure of the scheme to ensure that families can be in new homes as soon as possible.”

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