Budget 2017 - First Time Buyers Income Tax Refund


#41

Isn’t it the case that many of the <80% LTV FTBers are likely to be using parental gifts as deposits?

Regardless, the reason they don’t go to 80% is more likely to be the LTI restrictions than moral prudence or self-restraint.


#42

Here’s a different angle. I am FTB and had really only been thinking of purchasing a second hand home and doing it up. I dislike the new designs and lack of space. However, I would probably end up paying overprice and then committing 70-100k to upgrade the house. I am now thinking it is better financially to buy a new, A rated home, at a lower cost (than second hand), saving the upgrade money and getting 20k back. They have just pushed demand onto new builds.

Reduce CGT to 10% and you’ll get proper movement in housing sector.


#43

Noonan’s objective is to raise the price of new builds to stimulate supply (his reasoning, not mine).

I know that anecdotally this has happened already but that’s just an expectations thing; I’m not sure it will stick.

Sure, it means that FTBs will have more money to spend on new builds, but surely the non-FTBs who were going to buy a shiny new A-rated home will now just switch preference back to second hand homes which offer relatively better value, balancing supply and demand back again.

Overall there will be more money in the market, but I’d guess that will end up spread around evenly.


#44

I just don’t think there should be discrimination based on LTV.

The buyers who have a lower LTV, perhaps because of having lower incomes and not qualifying for higher amounts under LTI rules, will still face the increased prices that will inevitable arise as a result of the 5% rebate, but will not be able to avail of it, so they’ll be getting royally screwed simply because their earnings aren’t high enough. These could be people who have gotten generous parental help, or they could be lower income couples who have saved hard and can’t get their LTVs up to 80%+ because of the LTI restrictions. I just don’t see how it is equitable to discriminate based on LTV - either given it to all the FTBs of new homes up to €600k or give it to none IMO. It seems totally unfair.


#45

When will this decision be finalised once and for all? I have gone sale agreed on a property and had a 60% LTV. I couldnt go 80% LTV even if I wanted but 70% if possible but means restarting my mortgage application. It seems mad not to take a 70%LTV and get 5% cashback.


#46

I agree that it’s unfair. Given that it really is just a help-to-build scheme, the money should actually available to all FTBers. I always wonder how these things don’t end up challenged in the court?- as it’s essentially state aid to one cohort and not another.

But Ireland is built on inequality when it comes to housing.
The Mortgage Interest Relief is one just example: buyer who bought house 6 months earlier or later than the window doesn’t get to avail of relief… But those in an arbitrary window do. AND the relief got extended in duration. Just shocking stuff.


#47

Finalised next wk I think, accorsing to radio. Sure get application together and put it with your manager. Ask him to send it in to risk but not to axt on it until final details known. Should be approved straight off.


#48

That’s a bit of an odd statement. Clearly everyone does not have equals needs or means.

If a reference to fairness, you’ll never get agreement on what constitutes fairness because different people hold mutually exclusive ideas of what that means.


#49

Ok, to clarify, I understand that not everyone has equal means or needs. What does annoy me is when people with exactly equal means & needs are not treated equally by the State.

Mortgage Interest Relief is a prime example, I think.
2 people with exact same means & needs - but one buys a house on 30 Dec 2012, and another buys on 01 Jan 2013. The first gets mortgage interest relief on the purchase, the second doesn’t.
And while you might not think that is unfair, I’d argue that it is. But, you could say that was the tax regime at the time… “if you are in early, you benefit” etc etc. And I could grudgingly see your point.
But what is freakishly unfair is the extension of that interest relief in recent years - just because it buys votes - and yet those after can STILL not avail.


#50

It’s unfair, and I think most people would call it unfair (having bought this year, I’m quite jealous), but it’s pragmatic; abolishing it immediately would probably lead to a storm of defaults, and, since we can’t repossess in this country, either the raising of SVR interest rates or another bank bailout or both to compensate.

It’d make more sense to provide it only to those who were in danger of default without it, mind you.


#51

I think what it points to is people can’t afford to own the homes they buy. Mortgage interest relief, tracker mortgages, help to buy grant, complaints about CBank 80% limits, 2/3% cashback etc people are stretching all the time.

The cycle is inevitable. Brexit will be the Irish property markets next “it was Lehman what done it”. It is crazy to see one half of the news complaining about how Brexit will screw our small open economy and the next we big up house prices.


#52

I agree. But what would make more sense would be to give it to all home owners. And maybe restrict it to the first 5 years of the mortgage - not an arbitrary year when the purchase occurred.


#53

Wasn’t aware there was a 5 year rebate for anyone who gets the grant and then sells up.
independent.ie/business/budg … 48801.html


#54

First-time buyers scheme to be lowered to €500,000

irishtimes.com/news/politics … -1.2853191


#55

Also, if contracts signed before 2017, you get the money paid to you. From 2017, it goes straight to vendor i.e. developer. That’s unreal.


#56

How would that work with self-build - you can’t get the valuation until the house is finished and the builder is paid off by then?

I assume there’s some kind of tax/CGT issue to stop me “buying” my site from my parents and them gifting me back the money (to pay down the mortgage immediately) as a separate transaction?

I’m enraged by the unfairness of it all tbh - we’re making some serious compromises to settle where the site is, and I have decent savings so our LTV will be around 50% - but I paid all those (and more, much much more) taxes (and yes I know I am fortunate to have the site) and the idea that the government will “help” you only if you couldn’t/didn’t help yourself is just outrageous. But it’s not really about the buyer is it.


#57

SBP reporting the following:

“First-time buyer scheme faces axe. Bankers and estate agents warn of price surge in new year; FF accuses government of trying to push up prices”

Will FF try to steal the populist vote on the back of the property crisis. Be careful voters - It’s a trap :slight_smile:


#58

It would be amazing if FF lobbied to remove/reduce the FTBers scheme now - given all they created, or supported through inaction, in terms of bubbles over the last 20 years.

But, I guess they’ll make noise about the rebate, get some airtime, and then leave it as is…
…can’t be doing anything that might take gas out house prices, and reduce developers profit margins!
:sick:


#59

Help-to-buy scheme leads to 50% rise in first-time buyers

irishtimes.com/business/eco … -1.3352549

So I did the sums form the CSO release

cso.ie/en/releasesandpublica … ndicators/

Purchases of new builds by FTBs

Dec 2015 to Nov 2016: 1,961
Dec 2016 to Nov 2017: 3,056
Increase: 64%

Interestingly, the paper edition headline on Front Page said “Help-to-buy scheme boosting first-time purchasers” which seemed to imply it was helping, when one can argue prices all just went up 20K. They toned down the headline since


#60

Even 3000 FTBers buying new homes is pretty microscopic.

The cohort in the household-forming age group is about 80,000 per year.

Divide it by two - houses are usually bought by couples - and you have less than 10% of potential FTBers buying new homes.

Reliable statistics don’t go back long enough but I think this number has been over 30% in the past.

New house building is still far too low.