2017-21 help to buy scheme - megathread. All help to buy discussion here please

Stheno

morrga wrote: »

Thank you. You are getting my point.

Yes so either save and buy over 500k in your area or buy under it somewhere else and get the rebate.

Michael D Not Higgins

Stheno wrote: »

Not without an exception over 220k I thought?

And with an exception they would usually need an even higher salary, which means they'd be in the 150-200k salary range. Even less sympathy.

morrga

Earleybird wrote: »

I think you're missing the point. If you can afford to purchase a house for over 500k why would you deserve a grant? It doesn't matter where you're from. I remember you asking was the grant per house or per couple in a previous thread, at some point you need to realise you just sound plain greedy.

We can afford the repayments. But due to spiraling rents we have struggled to get the deposit together in recent years. Which was exactly the point of the policy. To give people a push to get on the ladder. And now they are supporting people who have LTV lower than 80%. That defeats the purpose of this incentive.

Christ a colleague in work mentioned it to me. I didn't believe it so I asked on boards which is the purpose of a forum.

We're far from greedy. We had a deposit ready for the house. But the house went up an extra 20k last month, surprise surprise. Now we are left high and dry and we are short 20k of the purchase price.

morrga

Michael D Not Higgins wrote: »

And with an exception they would usually need an even higher salary, which means they'd be in the 150-200k salary range. Even less sympathy.

That is categorically incorrect.

morrga

Stheno wrote: »

Yes so either save and buy over 500k in your area or buy under it somewhere else and get the rebate.

The point of the policy was it was taking so long for people to get to their deposit targets that this was a kick start to achieve their target and kick of sales and building m. We can keep saving for another 3 years. But that's another 3 years of renting.

Michael D Not Higgins

morrga wrote: »

That is categorically incorrect.

Explain how. If you want to buy a 600k home as a first time buyer with a 10% deposit, you'll need to qualify for an exception to the central bank rules. Banks will usually look for spare capacity in salary as the main criteria for allowing an exception but let's ignore that for now.

At 600k with 10% deposit, you'd need a mortgage for 540k, which at an income multiple of 3.5 is €154k.

morrga

Michael D Not Higgins wrote: »

Explain how. If you want to buy a 600k home as a first time buyer with a 10% deposit, you'll need to qualify for an exception to the central bank rules. Banks will usually look for spare capacity in salary as the main criteria for allowing an exception but let's ignore that for now.

At 600k with 10% deposit, you'd need a mortgage for 540k, which at an income multiple of 3.5 is €154k.

I'm not talking about 600k homes.

listermint

morrga wrote: »

We want to live in South Dublin on the Wicklow border. Carrickmines or Shankill hardly the Dalkey, Killiney profile. My point is the govt deem it ok to support couples in North Dublin who earn the same salaries as ourselves.

You are quite hilarious, I cant figure out though if you are being honestly amusing on purpose or not.

Your whole point being you are victimised because you cant afford a house on the Dublin Wicklow border.

Like that is literally what you are saying

Michael D Not Higgins

morrga wrote: »

I'm not talking about 600k homes.

And I was. I was talking about the lowering of the limit from 600k to 500k.

Earleybird

morrga wrote: »

The point of the policy was it was taking so long for people to get to their deposit targets that this was a kick start to achieve their target and kick of sales and building m. We can keep saving for another 3 years. But that's another 3 years of renting.

If it's going to take you 3 years to save 20k despite being able to get a mortgage for over 400k then I would suggest you find a less luxurious apartment to live or curb your lifestyle. Your figures don't add up!

morrga

listermint wrote: »

You are quite hilarious, I cant figure out though if you are being honestly amusing on purpose or not.

Your whole point being you are victimised because you cant afford a house on the Dublin Wicklow border.

Like that is literally what you are saying

Nope. The policy was designed to give people the last push to meet the higher deposit requirements. So instead of another 3 years of saving and renting we could buy now, trigger sales and help free up another apartment for the desperate rental sector.

pilly

morrga wrote: »

The point of the policy was it was taking so long for people to get to their deposit targets that this was a kick start to achieve their target and kick of sales and building m. We can keep saving for another 3 years. But that's another 3 years of renting.

You're so missing the point here OP and that's why you're gaining very little sympathy. There are plenty of choices in life and if you choose to live in a very specific area then that's completely your choice but you can not claim to be discriminated against because property is expensive in that area. Seriously, who's problem is it that houses in a very specific area are very expensive? No-one's except the people who insist they have to live there!

Actually, I've just thought of a comparison, it's like someone living up the North saying they're being discriminated because they can't claim the grant because of where they live. Sorry, doesn't wash.

listermint

morrga wrote: »

Nope. The policy was designed to give people the last push to meet the higher deposit requirements. So instead of another 3 years of saving and renting we could buy now, trigger sales and help free up another apartment for the desperate rental sector.

No the policy was to trigger sales of new houses.

The policy was not to trigger sales for people who cant afford houses outside the limits.

Which is what appears to be the case here.

You are not being victimised. Like everyone else if you want to live somewhere special then work hard and save. Id love to live by the sea in dalkey for example.

Wouldnt we all.

Stheno

morrga wrote: »

I'm not talking about 600k homes.

What are you talking about then? We're you about to purchase a home under 500k in your chosen area that has gone up 20k and is now over 500k? And was it a new build?

morrga

pilly wrote: »

Exactly, it's ludicrous! They can't claim discrimination because it's so ridiculous and neither can you.

They are governed by different parties, different rules different policies. I am talking about discrepancies in one jurisdiction. Don't muddy the waters with irrelevant statements.

Michael D Not Higgins

morrga wrote: »

But I am talking about Dublin exclusively.

It's the same distinction. Dublin is more expensive than the rest of Ireland, South Dublin is more expensive than the rest of Dublin, Dalkey is more expensive than the rest of South Dublin, Vico Road is more expensive than the rest of Dalkey. There's no discrimination.

morrga

Michael D Not Higgins wrote: »

It's the same distinction. Dublin is more expensive than the rest of Ireland, South Dublin is more expensive than the rest of Dublin, Dalkey is more expensive than the rest of South Dublin, Vico Road is more expensive than the rest of Dalkey. There's no discrimination.

Which is my point. So don't lower the threshold from 600k.

Stheno

morrga wrote: »

Which is my point. So don't lower the threshold from 600k.

I thought you weren't talking about 60k houses? Do you mind if I ask you again about the house you were going to buy?how much was it, was it in your preferred area and under 500k but is now over that?

Michael D Not Higgins

morrga wrote: »

Which is my point. So don't lower the threshold from 600k.

But I should be entitled to buy the new build in Rathgar which costs €1.15 million then. We shouldn't have a cap at all. Everyone should get the 20k, even if they have a deposit of 188k and a salary of 270k.

The line has to be drawn somewhere, otherwise it will be seen as a tax break for the rich.

Stheno

Michael D Not Higgins wrote: »

But I should be entitled to buy the new build in Rathgar which costs €1.15 million then. We shouldn't have a cap at all. Everyone should get the 20k, even if they have a deposit of 188k and a salary of 270k.

The line has to be drawn somewhere, otherwise it will be seen as a tax break for the rich.

Sure look at all the posters earlier in the thread who signed contracts before the opening day for this who were disgusted to have lost out!

CramCycle

morrga wrote: »

We want to live in South Dublin on the Wicklow border. Carrickmines or Shankill hardly the Dalkey, Killiney profile. My point is the govt deem it ok to support couples in North Dublin who earn the same salaries as ourselves.

Head down to Bray then, or slightly over to Blessington. Why won't you live somewhere else? Why do you think you are entitled to live where you grew up. My partner grew up in a very nice part of South Dublin but I accept that our salaries at this point in time do not "entitle" us to live there. It is not discrimination.

Stheno wrote: »

Sure look at all the posters earlier in the thread who signed contracts before the opening day for this who were disgusted to have lost out!

To hell with it, give everyone 20,000 back and be done with it.

In all seriousness, the grant should be looking to inspire more reasonably priced new housing all over the country. Outside of Dublin, it will just be helping people get on the ladder as houses are generally alot cheaper. Inside of the greater Dublin area, the cap would hope to provide a target price for builders to sell their house at, and not above. Having that cap at 500k is ridiculous, and I imagine a lobby group helped with this number. It should never have went above 350k.

As for that rubbish about north and south side, plenty of houses north of the river with million plus price tags and plenty below with sub 350k

68 lost souls

CramCycle wrote: »

Inside of the greater Dublin area, the cap would hope to provide a target price for builders to sell their house at, and not above. Having that cap at 500k is ridiculous, and I imagine a lobby group helped with this number. It should never have went above 350k.

As for that rubbish about north and south side, plenty of houses north of the river with million plus price tags and plenty below with sub 350k

Not too many below 350k southside. Perhaps the 20% up to 400k would be a compromise? Dunnno why you are adement of 350K? We are in the position of having found a new build we loved below 350k and missed phase 1, waited 6 months for phase 2 but they jumped by 30k to above 350k or so and couldnt afford but then this scheme was announced later so we can now purchase.

EDIT: Price jump was well before budget so that is not to blame

pilly

68 lost souls wrote: »

Not too many below 350k southside. Perhaps the 20% up to 400k would be a compromise? Dunnno why you are adement of 350K? We are in the position of having found a new build we loved below 350k and missed phase 1, waited 6 months for phase 2 but they jumped by 30k to above 350k or so and couldnt afford but then this scheme was announced later so we can now purchase.

EDIT: Price jump was well before budget so that is not to blame

I think that's cramcycles point. The whole idea of the scheme was to encourage builders back into building affordable houses for first time buyers.
500k is way above what anyone could call affordable. I agree 400k could be a compromise.

ifaour

Did someone workout the math to see if getting a mortgage on 80% LTV to avail of the tax rebate is better OR if I can bring the LTV down to, say 75% and not take advantage of the rebate would be better for me?

This is assuming property price is 320K and APR of what the big banks are offering for 80% vs 70-80%

Michael D Not Higgins

ifaour wrote: »

Did someone workout the math to see if getting a mortgage on 80% LTV to avail of the tax rebate is better OR if I can bring the LTV down to, say 75% and not take advantage of the rebate would be better for me?

This is assuming property price is 320K and APR of what the big banks are offering for 80% vs 70-80%

They already lowered the bar to 70% minimum.

morrga

The 600k threshold will remain until 31st December so once contracts are signed before then, we qualify!!

Michael D Not Higgins

morrga wrote: »

The 600k threshold will remain until 31st December so once contracts are signed before then, we qualify!!

Can you source this, please?

morrga

Michael D Not Higgins wrote: »

Can you source this, please?

Yes, spoke to Michael McGrath this afternoon who confirmed this will be noted in the bill when published.

Michael D Not Higgins

morrga wrote: »

Yes, spoke to Michael McGrath this afternoon who confirmed this will be noted in the bill when published.

I doubt this to be the case, especially when FF were the ones pushing for the 500k limit. Not saying you're lying but he might be.

morrga

Michael D Not Higgins wrote: »

I doubt this to be the case, especially when FF were the ones pushing for the 500k limit. Not saying you're lying but he might be.

Have an e mail from Barry Cowen too confirming the same. Said it's unfair to remove it for current year transactions given that people would have acted upon the original announcement.

Michael D Not Higgins

morrga wrote: »

Have an e mail from Barry Cowen too confirming the same. Said it's unfair to remove it for current year transactions given that people would have acted upon the original announcement.

I guess that's fair.

morrga wrote: »

Now we are left high and dry and we are short 20k of the purchase price.

Keep in mind the rebate is paid next year and you will need to qualify for the mortgage without the rebate.

morrga

Michael D Not Higgins wrote: »

I guess that's fair.



Keep in mind the rebate is paid next year and you will need to qualify for the mortgage without the rebate.

I do need to mind that alright. I think we are not drawing down till April so will apply for rebate in January.

Michael D Not Higgins

morrga wrote: »

I do need to mind that alright. I think we are not drawing down till April so will apply for rebate in January.

Good luck.

CramCycle

68 lost souls wrote: »

Not too many below 350k southside. Perhaps the 20% up to 400k would be a compromise? Dunnno why you are adement of 350K? We are in the position of having found a new build we loved and missed phase 1, waited 6 months for phase 2 but they jumped by 30k or so and couldnt afford but then this scheme was announced later so we can now purchase.

I am not adamant on it. The number has to be high enough that it won't completely put off developers in the likes of Dublin, elsewhere it really just has to be above the price of the house build plus a reasonable profit for the area.

I tried to pick a number that covered in reasonable areas, land price, build price, modest (but not unreasonable) profit for the developer. 350k might be too little or too much. The number also has to be low enough not to incentivise developers to throw on an extra 20k to their new build price tag in expensive areas.

With this in mind, developers can start the builds with a specific price point in mind that is not out of the reach of first time buyers with the supplement, but not such grandiose builds in already over priced areas that they would just knock these people away regardless.

The bill should be there to incentivise new builds in many areas. Some areas will not apply because they are already to built up (although it might incentivise knock downs and rebuilding of houses to build up 3 story houses or apartment blocks).

If you have saved up enough to buy a house worth 500k+ on your first purchase, then you obviously can either wait or you can buy somewhere cheaper. For alot of first time buyers, this is not the way it works for a variety of reasons, between low income, high rents and other factors. If you can save a deposit for a 500k house, those factors are most likely not as big an effect on your life as you might perceive them to be.

CramCycle

Michael D Not Higgins wrote: »

I doubt this to be the case, especially when FF were the ones pushing for the 500k limit. Not saying you're lying but he might be.

Talking to the tax expert in work and she said the same. Even if details are changed about limits, it is nearly unheard of, for them not to honour the initial announcement to cover those who may have acted on the budget announcement, her version was that they take it as gospel that if a date has been announced, as in theory it is live straight away, they go with it to the 31st of December, if there was need of revision (as in this case) it would be a revised version from 1st January and if it was a complete sh1t storm, they would still leave it there for the year. Seems fair enough to me, although I would not have bought a house on the back of the original announcement but this is what people who know better than me say.

Michael D Not Higgins

Michael D Not Higgins wrote: »

And with an exception they would usually need an even higher salary, which means they'd be in the 150-200k salary range. Even less sympathy.

Michael D Not Higgins wrote: »

But I should be entitled to buy the new build in Rathgar which costs €1.15 million then. We shouldn't have a cap at all. Everyone should get the 20k, even if they have a deposit of 188k and a salary of 270k.

The line has to be drawn somewhere, otherwise it will be seen as a tax break for the rich.

I have to say I totally disagree with capping it on house price and having the ltv limits. It should be open to all FTBs regardless of house value or how much they need to borrow. It's the only fair system imo. Basically people who saved hard are being penalised compared to those who saved less and people able to afford more expensive houses are also being penalised.

So not only is a higher earner subsiding the day to day living of lower earners due to our very unfair tax system which penalises those who do well and gives everything to those who do nothing but now they are also helping people buy houses while they themselves are being prevented from getting the relief on their already far higher tax burden. Total bull.

Bob24

Nicole Hissing Thunderstorm wrote: »

I have to say I totally disagree with capping it on house price and having the ltv limits. It should be open to all FTBs regardless of house value or how much they need to borrow. It's the only fair system imo. Basically people who saved hard are being penalised compared to those who saved less and people able to afford more expensive houses are also being penalised.

So not only is a higher earner subsiding the day to day living of lower earners due to our very unfair tax system which penalises those who do well and gives everything to those who do nothing but now they are also helping people buy houses while they themselves are being prevented from getting the relief on their already far higher tax burden. Total bull.

I think the only fair system is to scrap the scheme altogether. At the end of the day the problem is not high income v.s. low income, it is more all taxpayers (either on low or high income) subsiding developers through this scheme which is not addressing the supply issue and hence not helping anyone but developers.

Having said hat if it has to remain, I would rather have it capped so to limit the damage in terms of wasted taxpayer's money and artificially inflated prices.

CramCycle

Nicole Hissing Thunderstorm wrote: »

I have to say I totally disagree with capping it on house price and having the ltv limits. It should be open to all FTBs regardless of house value or how much they need to borrow. It's the only fair system imo. Basically people who saved hard are being penalised compared to those who saved less and people able to afford more expensive houses are also being penalised.

So not only is a higher earner subsiding the day to day living of lower earners due to our very unfair tax system which penalises those who do well and gives everything to those who do nothing but now they are also helping people buy houses while they themselves are being prevented from getting the relief on their already far higher tax burden. Total bull.

Its not really though. Houses are over priced in the eyes of many but that is what the market dictates at the minute. People who have over a certain amount available to buy, and/or wages to support a far higher mortgage, are in no need of such a scheme and applying it to them only further inflates house prices, as well as increases the burden on the exchequer.

You have some of that money going straight back into the exchequer with stamp duty, then repaid via LPT over a few years, as well as, in theory, should it take off, increasing supply of houses for first time buyers.

In the long run, if it works (and that is a huge if), the supply will come close to meeting demand. Pricing will no longer be as extortionate (but this also depends on local councils and planning authorities pulling out their finger and allowing suitable building and infrastructure developments to take place). The system can be left on the books or scrapped as new home builds will be reduced over time after increasing for several years.

Collyb101

My GF and I have only one household in the whole of Dublin we are related to. We would love to live close to them so our kids could play together etc. The area is too expensive and we are going to buy at the opposite side of Dublin. No complaints. Completely understandable. Not yapping. We cannot afford it and that's that.

pilly

Collyb101 wrote: »

My GF and I have only one household in the whole of Dublin we are related to. We would love to live close to them so our kids could play together etc. The area is too expensive and we are going to buy at the opposite side of Dublin. No complaints. Completely understandable. Not yapping. We cannot afford it and that's that.

Exactly the point a lot of people have been trying to make. Phrased perfectly. We would all love an ideal home and a grant off the government but we can't all have one.

ionapaul

I have to say I agree with Korbin Puny Circle - capping it at a certain price is extremely arbitrary and isn't very fair. Given that the scheme is only open to first time buyers who are purchasing a new build, it isn't like the public finances are going to be blown away by the limited (in the grand scheme of things) amount of €500k+ new builds bought in Ireland each year by FTBs. The number impacted by the limit HAS to be fairly low, and practically all based in Dublin for that matter. The fact that they can raise the deposit necessary for a house of say €750,000 shouldn't matter, nor should their annual income; given that so many other across the board subsidies are available that are non means tested (children's allowance, free travel for OAPs, etc...).

If I - being a prudent man - had waited until I was in my mid-40s to buy a house, until I was married, until I had progressed my career to a level that I felt happy to take on the burden of a mortgage for the first time, I'd be a bit peeved that a new build that costs €500,001 would mean this rebate was unavailable to me, but one that cost €499,999 was deemed 'an average house' or whatever by the court of public opinion! I'm not arguing from personal interest here (bought a modest second-hand entry-level house last year so am no longer an FTB) but can definitely see why on an objective level this arbitrary house price cap is quite unfair, it simply doesn't make any sense. Why not cap it at €400,000, €300,000 or €200,000 if the object of the exercise is to incentivise the building of 'starter' homes?

ionapaul

Bob24 wrote: »

I think the only fair system is to scrap the scheme altogether. At the end of the day the problem is not high income v.s. low income, it is more all taxpayers (either on low or high income) subsiding developers through this scheme which is not addressing the supply issue and hence not helping anyone but developers.

Having said hat if it has to remain, I would rather have it capped so to limit the damage in terms of wasted taxpayer's money and artificially inflated prices.

However, I'd also like to add that my preferred option would definitely be to scrap the scheme in its entirety, as mentioned above I just think that if the scheme is here to stay that price caps of any kind are manifestly unfair, given that it's open solely to FTBs buying new builds.

cronos

ionapaul wrote: »

However, I'd also like to add that my preferred option would definitely be to scrap the scheme in its entirety, as mentioned above I just think that if the scheme is here to stay that price caps of any kind are manifestly unfair, given that it's open solely to FTBs buying new builds.

I'd say try it for a year. See what happens, if it's not looking like it's going to work announce mid-year that its likely not to continue or it will be reformed. Scrapping it now would be crazy and anyway it won't happen.

izzyflusky

I was reading FAQs about the scheme and it mentions that for dwellings bought after January 2017 the rebate will be paid directly to the contractor. At risk of sounding stupid, what does this mean exactly for the buyer? A smaller deposit required? Or just a smaller borrowed sum?

OfflerCrocGod

Both.

izzyflusky

So will banks accept a deposit of X minus the 5% when applying?

If originally I needed let's say 33k I could get a mortgage with a 19k+ deposit? Or would they expect the 33k regardless?

q85dw7osi4lebg

izzyflusky wrote: »

So will banks accept a deposit of X minus the 5% when applying?

If originally I needed let's say 33k I could get a mortgage with a 19k+ deposit? Or would they expect the 33k regardless?

The bank will factor it in, so the lower amount still stands.

cronos

Can someone walk me through trying to gain a 70% LTV loan for the help to buy scheme in the following scenario.

House price: 380,000
Salary + performance based bonus : 70k + 11k

70k * 3.5 = 245,000 (central bank 3.5 times salary rule)
70% of 380,00 is 266,000

Where does the help to buy money fit into the above equation? Anyway for me to qualify for the mortgage?

How do bonuses count towards the 3.5 times salary rule?

athtrasna

Mod note

All help to buy discussion goes in this thread as per thread title.

q85dw7osi4lebg

cronos wrote: »

Can someone walk me through trying to gain a 70% LTV loan for the help to buy scheme in the following scenario.

House price: 380,000
Salary + performance based bonus : 70k + 11k

70k * 3.5 = 245,000 (central bank 3.5 times salary rule)
70% of 380,00 is 266,000

Where does the help to buy money fit into the above equation? Anyway for me to qualify for the mortgage?

How do bonuses count towards the 3.5 times salary rule?

Banks count between 30 and 50% of the previous years commission / bonus towards your income when multiplying.

It is possibly an exception could be made given the salary level.