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Help to Buy- Budget 2017

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A new scheme is being introduced to provide a rebate of income tax paid (but not USC or PRSI) over the previous 4 years for first time buyers buying a newly built principal private residence or equivalent self build, on or after 19th July 2016. The rebate will be 5% of the purchase price of the property up to €400,000, i.e. a maximum rebate of €20,000 per property (not per joint buyer) assuming the buyer(s) have paid at least €20,000 income tax over the previous four year period.

The rebate only applies where the mortgage is at least 80% of the home value.

Those who will NOT qualify for the rebate include:

• First time buyers who signed a contract to buy a new home before 19th July 2016;

• First time buyers with an LTV less than 80%;

• First time buyers buying a home valued at more than €600,000;

• Non first time buyers; and a joint purchase between a first time buyer and non first time buyer; both purchasers must be first time buyers

The rebate scheme is scheduled to run to end of 2019.

 

 

Central Bank told to change lending rules

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Fianna Fail and Labour call for deposit cuts for first-time buyers struggling to get on ladder.

First-time buyers are being frozen out of the housing market due to high rents coupled with the massive mortgage down payments they are forced to save due to the Central Bank rules.

Young families hoping to trade-up are also being crippled by the lending conditions which mean they have to save a huge 20pc deposit on any home they hope to buy.

Fianna Fail is calling for the rate for first-time buyers to be slashed by a third if the house-buyer has a proven track record of paying rent for three years.

The party’s submission, which was prepared by Fianna Fail finance spokesman Michael McGrath, also calls for new laws which will force banks to take out insurance against losses arising from borrowers defaulting, or entering into a mortgage arrears resolution process.

The cost would be shared between the borrower and lender – the bank would add an interest rate to the loan to cover the insurance.

Homeowners warned about paying too much for house insurance

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The Society of Chartered Surveyors (SCSI) has warned that homeowners may be overpaying for house insurance. It says they are paying for more cover than they can claim in the event that they need to rebuild their home– and overpaying on their insurance premium as a result.

The most common mistake homeowners made was to confuse the market value of a property with its rebuild cost. For example, the average three bed semidetached 95sq m (1,023sq.ft) house in Donegal is €85,000, but the rebuilding cost based on the SCSI house rebuilding guide is €117,000.

In contrast, a similar property in Dublin could sell for €350,00, but has a rebuild cost of €181,000.

Having the correct reinstatement value will not only make certain that you are not over- or underinsuring your property but will also avoid overpayment when it comes to your home insurance premium.

Campaign wants 20,000 to switch mortgages

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A massive campaign to get 20,000 variable-rate mortgage holders to switch to another provider is to be launched.

The One Big Switch group aims to do a deal with a bank for lower mortgage rates in return for delivering thousands of switchers to it.

The group has already negotiated deals with electricity providers and health insurers for those who sign up with it. It has a database of some 80,000 registered consumers.

There are around 370,000 people on variable rates in this country, with customers paying some of the highest interest rates in the eurozone.

It is estimated that switching to the best-value mortgage could see a family with a €250,000 home-loan saving around €1,500 a year.

“If 20,000 people are prepared to switch together it will unlock the buying power for a group discount,” Lachlan Harris of the One Big Switch campaign said.

Once the group has thousands of mortgage holders who register for the mortgage campaign, One Big Switch will then negotiate with the banks for an exclusive group discount.

Noonan refuses to demand mortgage rate cuts by banks

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Finance Minister Michael Noonan has said he believes the country’s main banks will slash their high variable rates if their customer bases come under “threat” from new competitors.

Senior bank executives told Mr Noonan last week that they had put in place a series of “options” for borrowers, which would allow them to reduce their monthly payments.

These include fixed rates that are lower than variable rates.

Mr Noonan has urged mortgage holders to contact their banks and switch provider “if the offer is not satisfactory”.

But he is understood to have refused to request banks to slash their rates.

The minister is instead banking on the prospect of them doing so voluntarily as a result of increased competition.

“Competition is the best long-term way of reducing interest rates paid by Irish borrowers and ensuring that Irish banks offer a sustainable product range,” Mr Noonan said in response to a parliamentary question by Mayo Fine Gael deputy Michelle Mulherin.

Plan to give landlords tax deal in return for rent freeze.

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The Fr Peter McVerry Trust and Ibec’s Property Industry Ireland have joined forces to endorse a plan to allow landlords treat property tax payments as an expense – in return for giving tenants a rent break.

Landlords would “opt in” to the scheme. After two years, if the tenant produces a letter confirming that the rent did not increase, then the landlord would get the extra tax benefits.

Landlords that sign up for a two-year rent freeze would treat property tax as an expense, and get full mortgage relief when filing a tax return.Landlords can only claim 75pc of the interest they pay on a mortgage against their tax bill following a budgetary change during the economic downturn.

Property prices rise nationally but fall in capital

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The cost of buying a home has risen by more than 10pc year-on-year, but prices are falling in Dublin.

The Central Statistics Office (CSO) says residential property prices in the capital have dropped by 0.4pc in June, compared with a national increase of 0.1pc across the country.

And although house prices continue to increase, the rate of that rise has slowed down.It says that prices rose nationally by 0.1pc in the month of June, compared with 0.5pc in May and an increase of 2.9pc recorded in June of last year.

This is likely due to new rules introduced by the Central Bank in February which require first-time buyers to have saved 10pc of the property price, and second-time buyers at least 20pc, before they can secure a mortgage.

However, in Dublin, prices are falling, down 0.4pc last month. Despite this, prices are still 11.1pc higher than a year ago. The fall was more pronounced for apartments, which dropped 0.4pc, compared with 0.3pc for houses

Property prices rise at fastest pace in the EU

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House price rises in Ireland were the highest in the European Union last year.

They increased by more than six times the EU average in the first three months of this year.

The annual rise was close to 17pc in the three months to March compared with the same quarter last year.

This was the highest rise in the EU, according to the Eurostat House Price Index.

The EU statistical office said the surge in prices here was despite prices actually falling in the three months to March.

Sweden had the next highest rise in prices, at 11.6pc in the year to March, followed by Hungary at close to 10pc.

Fears first-time buyer grant would push up home prices.

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A Labour Party proposal to introduce a cash grant scheme for first-time buyers is likely to be shot down amid fears it would cause house prices to increase further.

The measures would mean the minister directs local authorities to provide cash grants to applicants struggling to get onto the property market in cities such as Dublin, Cork, Limerick and Galway.

Dublin Central TD Joe Costello and party chairman Jack Wall said measures are needed to assist those trying to get onto the property ladder.

But senior Government sources have voiced caution over such a move, warning against any such measure that could cause house prices to escalate further.

Mr Kelly is also due to roll out a suite of measures aimed at stalling spiralling rent bills

Young people are moving back home to save for a deposit

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Thousands of younger people are moving back to their parents’ homes in a bid to save money for a deposit for a house, a survey has found.

The belief that Ireland is likely to follow Europe by becoming a nation of renters is widespread and particularly strong among the 18- to 24-year age group, the survey of 1,000 people found. Three-quarters of people in this age group believe Ireland will become a nation of renters.

But 70pc of all age groups believe that the expectation of owning their own home is now unrealistic.

And brokers have warned people not to be sucked in by “glitzy” offers like cash back and money for paying legal fees when it comes to choosing a mortgage provider.

More than a quarter of people between the ages of 25 and 34 said they had moved back to their parents’ homes to save for a deposit on a home, according to the survey commissioned by Aviva Home Insurance.