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Proposal for a Generous New Grant for First Time Buyers

[Deleted User]

What to make of this?
First-time buyers to get generous new grant

Favourite line is this one:

Finance Minister Michael Noonan is also wary about ensuring the scheme will not interfere with either the supply of, or demand for, housing.

I mean, how can it not? Giving people more money - whether by a grant, interest relief or through tax credits - will mean everyone (all FTBs) will have a bit more money to spend. This helps prices upwards, nothing else.

I mean, fine, if that's what we want - (I don't really think it is) - but why pretend interfering is not going to affect demand?

Can they not just say: 'we're introducing lots of measures as part of a housing package - some will affect will increase supply, some will increase demand, and we hope it all balances out but with fewer people on housing lists in the end'.

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Hazydays123

Eric Cartman wrote: »

tracked for inflation throughout the rest of time, anyone who pays a 2005-2007 price for any house on this island should have themselves examined by a mental health professional.

But what we all need to realize is that any type of measure that aims to put free money in the pocket of a FTB is basically trying to encourage us back into a situation where we think it's normal to pay those crazy prices.
As a FTB today, I'm suddenly starting to realize that the Government doesn't have my best interests at heart, despite the fact that they want to put a wad of cash in my pocket.

Now I see all they have to gain back from this in terms of stamp duty, property tax, etc.

mjp

Is there any provision here for people who are self building their own houses. Can't see anything mentioned in reports about it as they have same challenges with increased cost of building without mentioning all the new regulation's they must comply with regarding having renewables in their homes

Wesser

I would like to ask a question.

I read an article about this incentive in a newspaper today and it said that until next January it will be offered as a rebate.
So this means that you only get the money after buying the house.
So this means that you cannot add it to your deposit, and therefore it does not count towards your 10 % of your deposit and therefore add 30 k on to your buying power.
As I follow on from my last question I don't really see how 3 k will make any difference here. People are not 3k away from buying a house, they are 100 k away from buying a house.
Without being nasty, I am just asking a genuine question, can someone explain to me why people think it will make house prices go up do dramatically. As far as I can see it will only make house prices go up by 3 k, as you only get the money back after you buy and cannot add it to your deposit. 3 k is not my problem..... About 100 k is my problem!!!!

If someone can explain nicely I would be grateful.

thierry14

Question regarding the back dated comments

I am buying 1st house now, deposit paid, contracts signed by both parties just finalising closing payment and tenants are finishing notice.

Will I get the back dated payment ye think?

Contracts signed last week.

athtrasna

thierry14 wrote: »

Question regarding the back dated comments

I am buying 1st house now, deposit paid, contracts signed by both parties just finalising closing payment and tenants are finishing notice.

Will I get the back dated payment ye think?

Contracts signed last week.

Nobody can say. The detail of the grant programme hasn't been published. Maybe, maybe not but you have your first home. Enjoy that and if you get the grant it's a nice bonus.

FrStone

Wesser wrote: »

I would like to ask a question.

I read an article about this incentive in a newspaper today and it said that until next January it will be offered as a rebate.
So this means that you only get the money after buying the house.
So this means that you cannot add it to your deposit, and therefore it does not count towards your 10 % of your deposit and therefore add 30 k on to your buying power.
As I follow on from my last question I don't really see how 3 k will make any difference here. People are not 3k away from buying a house, they are 100 k away from buying a house.
Without being nasty, I am just asking a genuine question, can someone explain to me why people think it will make house prices go up do dramatically. As far as I can see it will only make house prices go up by 3 k, as you only get the money back after you buy and cannot add it to your deposit. 3 k is not my problem..... About 100 k is my problem!!!!

If someone can explain nicely I would be grateful.

While I do think it may increase prices, I don't think it will increase them as dramatically as stated here.

It will give first time buyers a bit more leverage against other buyers. i.e those buying their second home. FTB already have an advantage of needing a reduced deposit, but obviously the government have decided FTBs need to be helped. Most likely because home ownership is a laudable aim for society.

Bob24

Hazydays123 wrote: »

Now I see all they have to gain back from this in terms of stamp duty, property tax, etc.

I think the fact that th government still owns large parts of a number of banks also plays a part.

If the measure allows you to borrow a few 10000s more it means that:
1. You will potentially pay more interests to the bank it owns (just this might be as much as the grant or more)
2. Probably the most important factor, it will lead to increased house prices which in turn will improve its banks balance sheets and enable it to sell them back to private investors with a profit

In a way it is acting in the tax payer's short term interest. But clearly not in the long term one as it has the potential for creating another banking crisis very similar to the previous one as the same mistakes are being made.
And yes you are absolutely right, this is serving some groups interest, but certainly not FTBs.

The_Conductor

Wesser wrote: »

I would like to ask a question.

I read an article about this incentive in a newspaper today and it said that until next January it will be offered as a rebate.
So this means that you only get the money after buying the house.
So this means that you cannot add it to your deposit, and therefore it does not count towards your 10 % of your deposit and therefore add 30 k on to your buying power.
As I follow on from my last question I don't really see how 3 k will make any difference here. People are not 3k away from buying a house, they are 100 k away from buying a house.
Without being nasty, I am just asking a genuine question, can someone explain to me why people think it will make house prices go up do dramatically. As far as I can see it will only make house prices go up by 3 k, as you only get the money back after you buy and cannot add it to your deposit. 3 k is not my problem..... About 100 k is my problem!!!!

If someone can explain nicely I would be grateful.

The proposal is to have an income tax rebate- backdated from the first of July, on the purchase price of the new property for first time buyers. The rebate will be limited to the first 250k value of the property- and any properties with a purchase price of over 300k are automatically excluded from the scheme.

Its a rebate on income tax- to be applied by Revenue- it is not a lumpsum upfront, it is valid for a specific window of time- and it doesn't apply to properties over a particular value.

How is (as in what percentage of a rebate on income tax)- I do not know.

Given that its proposed to dripfeed the 'rebate' back to FTBs via staggered income tax rebates- rather than as a lumpsum at any particular point in time- it is intended to be structured in such a manner that it'll have minimal impact on house prices.

As the old expression goes- 'no good deed goes unpunished'. The devil will be in the detail- and the detail has not yet been published- though contacts say there is an AP with multiple options and possible outcomes mulling over at least 3 different scenarios with their team- none are perfect- and all have downsides as well as upsides. I don't know which of the preferred options they are going to go with- whats been prepared is a menu- with the merits of each prospective course of action discussed in a neutral manner.......... Given the sensitivity of this- the PO is going to have to bring this to upper management for a decision- its not something that is going to happen at Divisional level (though it is somewhat comforting that the Minister seems to have landed on his feet- and actually appears to have a Departmental structure in place as fast as he has done).

Villa05

So in summation the help to buy scheme helps everyone except people trying to buy a home and people renting.

I suppose the government are consistent in adding to the problem rather than resolving it

The_Conductor

Villa05 wrote: »

So in summation the help to buy scheme helps everyone except people trying to buy a home and people renting.

I suppose the government are consistent in adding to the problem rather than resolving it

I hear what you're saying- I do think you're being a bit harsh though........
If they wanted to help 'everyone'- they'd simply reinstate mortgage interest relief- at a higher level.

The proposed option is structured in such a way that there is no lumpsum involved for first time buyers- so there is no pressure put on prices which would devalue the 'gift' from the government to the cohort who presumably would qualify for the scheme.

If new builds are specified- a max price- and no lumpsum involved- presto- you have a cohort of incentivised owners who will pile pressure on builders to meet requisite targets to bring new units to the market.

Presumably a large percentage of these prospective owners of new properties are currently renting- so you create a commensurate amount of vacancies in rental properties- as these new builds come on stream..........

Its designed to pressurise prospective owners into pushing to get new units up and running asap.

It seems like a reasonable idea to me- but of course it depends on how its implemented.

Bob24

The IT this morning is mentioning a figure of 10000 euros per couple:
http://www.irishtimes.com/news/politics/housing-plan-first-time-buyer-couple-set-for-10-000-package-1.2727712

Bob24

The_Conductor wrote: »

The proposed option is structured in such a way that there is no lumpsum involved for first time buyers - so there is no pressure put on prices which would devalue the 'gift' from the government to the cohort who presumably would qualify for the scheme.

If new builds are specified- a max price- and no lumpsum involved- presto- you have a cohort of incentivised owners who will pile pressure on builders to meet requisite targets to bring new units to the market.

I don't know how accurate their information is, but the article I linked above says "It is understood the scheme being worked on by the Government is a combination of assisting first-time buyers with tax rebates and helping with top-ups to cover a mortgage deposit.".

The_Conductor

Bob24 wrote: »

I don't know how accurate their information is, but the article I linked above says "It is understood the scheme being worked on by the Government is a combination of assisting first-time buyers with tax rebates and helping with top-ups to cover a mortgage deposit.".

My understanding is that there is nothing set in stone- there are a number of options which have been outlined- and upper management have yet to make a decision on which option they are going with. Their initial proposal has already been shot down by Revenue- and they were told to come up with a new proposal and resubmit for evaluation/clearance.

The knux of the reason the original option was unacceptable- was it was structured in such a way that while it provided a lumpsum to first time buyers- it was not structured in such a manner that there was any imperative to pressurise builders to deliver new units to the market. The new scheme is to address supply side first and foremost- by incentivising these first time buyers into pressurising builders- in a manner in which they simply don't have power at the moment.

The last thing they want is people wandering around with a lumpsum burning a hole in their pockets- without a commensurate increase in supply- i.e. you have a cohort of first time buyers- simply bidding up the price of properties by whatever their new found spending power may be.

Bob24

The_Conductor wrote: »

The last thing they want is people wandering around with a lumpsum burning a hole in their pockets- without a commensurate increase in supply- i.e. you have a cohort of first time buyers- simply bidding up the price of properties by whatever their new found spending power may be.

For sure this is the lat thing we should want as a country. But I have to say I am not completely sure this is the last thing the government or some vested interests which are pressuring it want.

[Deleted User]

The_Conductor wrote: »

The proposal is to have an income tax rebate- backdated from the first of July, on the purchase price of the new property for first time buyers. The rebate will be limited to the first 250k value of the property- and any properties with a purchase price of over 300k are automatically excluded from the scheme.

Has it been spelled out anywhere that it will be from the first of July? I saw Coveney mention yesterday that it will be backdated to "today", i.e. yesterday 19th July.

Sale closed last Friday so obviously I'm hoping it's to the first of July.

68 lost souls

The_Conductor wrote: »

The proposal is to have an income tax rebate- backdated from the first of July, on the purchase price of the new property for first time buyers. The rebate will be limited to the first 250k value of the property- and any properties with a purchase price of over 300k are automatically excluded from the scheme.

So no use to anyone in Dublin then, what a joke

Lu Tze

68 lost souls wrote: »

So no use to anyone in Dublin then, what a joke

House price, 300k, fittings etc 100k!

I'm glad we bought at the start of last year, missed the bottom of the market by about a year or a bit more, prices have remained static since more or less. But it was the right time for us to buy, just lucky. All these proposals and speculation (with no details) just add uncertainty, which usually isn't good for prices (if you are buying)

Villa05

The_Conductor wrote:

I hear what you're saying- I do think you're being a bit harsh though........ If they wanted to help 'everyone'- they'd simply reinstate mortgage interest relief- at a higher level.

Maybe I am, but reading between the lines Fiana fail are threatening to not support if it's not there proposal of an increased deposit. SSIA Style (The party that's supposedly learnt from past mistakes)

The irish times are saying their is an increased deposit plus there should be nothing done on the demand side until firm commitments have been undertaken on the supply side and I don't mean promises

thierry14

athtrasna wrote: »

Nobody can say. The detail of the grant programme hasn't been published. Maybe, maybe not but you have your first home. Enjoy that and if you get the grant it's a nice bonus.

Thanks

Yeah that's true no real details have been published yet

I am just wondering when is the house officially bought

The day both contracts are signed or the day final payment is recieved/deeds transferred?

thierry14

Dónal wrote: »

Has it been spelled out anywhere that it will be from the first of July? I saw Coveney mention yesterday that it will be backdated to "today", i.e. yesterday 19th July.

Sale closed last Friday so obviously I'm hoping it's to the first of July.

This is what I am wondering too.

I have just the final payment to send ( waiting 7 days for deposit account to mature for final payment )

Contracts signed last week by both parties

Hope I won't miss it.

Thinking of contacting solicitor to see can I delay it/ is there a point.

Up to 10k for a couple rebate is no joke

68 lost souls

Lu Tze wrote: »

House price, 300k, fittings etc 100k!

Would that actually work? Im sure they will just look and see deposit + mortgage =400k therefore not allowed

seamus

68 lost souls wrote: »

Would that actually work? Im sure they will just look and see deposit + mortgage =400k therefore not allowed

You can't get away with that any more. The purcahse price is the full amount paid, you can't split it out as property -v- fittings.

You can theoretically, but that would involve a second under-the-table deal where you hand over €100k outside of the contract of sale. But anyone (vendor, buyer or solicitor) who would get involved in that risky business is a complete moron.

AtomicHorror

thierry14 wrote: »

This is what I am wondering too.

I have just the final payment to send ( waiting 7 days for deposit account to mature for final payment )

Contracts signed last week by both parties

Hope I won't miss it.

Thinking of contacting solicitor to see can I delay it/ is there a point.

Up to 10k for a couple rebate is no joke

Similar situation here. Buying a new build- signed the building agreement but not the contract for sale yet. Paid booking deposit and an additional deposit with the building agreement but probably won't be closing until mid-August. Much depends on when we're considered to have bought the house. In theory we're already fully committed, can't withdraw from the sale without big problems and could only retrieve our deposit in the event the bank refused to allow draw down.

Bob24

68 lost souls wrote: »

So no use to anyone in Dublin then, what a joke

Which is where the housing crisis is the most acute ... if there is such cap and not serious measures to reduce land and construction costs, I don't see how it can encourage the construction of new homes. Aside maybe from small apartments, you wouldn't see too many new homes hinting the market in Dublin sub 300k even though the demand very much exists already,it must mean developers don't see it as good business and if nothing beside the buyer incentive is changing they will still think the same in a year's time.

Idbatterim

I just came here to post what you guys already have. 300k in Dublin, at a push with new apartment size regulations might get you a one bed in an on suburb, possibly a house a good bit out of centre... Developers aren't going to drop scheme prices to get them in under the threshold. They will seek the max they can get, which is understandable...

Only earlier today I was reading a times article about the runaway commercial rents. These idiots attempts to only allow low rise in Dublin is futile and massively exacerbating the problem. They will be forced to capitulate on it, it will all be for nought, but not before a lot more damage is done. I hear the idiots on media all day long. You can actually discredit pretty much anything they say, allowing far taller buildings and a decent transport system for Dublin are top of the solutions.

Their pathetic band aid on a titanic sized hole solutions will do nothing. Still good to deflect from the hse and god knows what other **** is going on, that can all be swept under the rug while we have this side show going on! Which it will for god knows how long...

Idbatterim

Bob24 wrote: »

Which is where the housing crisis is the most acute ... if there is such cap and not serious measures to reduce land and construction costs, I don't see how it can encourage the construction of new homes. Aside maybe from small apartments, you wouldn't see too many new homes hinting the market in Dublin sub 300k even though the demand very much exists already,it must mean developers don't see it as good business and if nothing beside the buyer incentive is changing they will still think the same in a year's time.

Charge far more tax on land sales, with the stick that they can't be left idle introduce a meaningful vacant land levy and yes reduce construction costs if possible. The biggest one though is simply allowing far higher density developments, that's the low hanging fruit...

Big Developers should simply refuse to build residential until they allow higher densities. Or central bank impose tighter lending regulations again, somebody needs to force the issue. At the moment we have councillors who seek election every few years going to nimbys looking for votes and probably all going on the platform of " not here, not in my back yard" or if development is a given " no 4 floor high rise "

MarkAnthony

68 lost souls wrote: »

So no use to anyone in Dublin then, what a joke

There are plenty of properties in Dublin under 300K including 3 beds. The government should be applauded for continuing to push areas which have seen significant regeneration and some gentrification over the years as more buyers have moved into these areas.

FTBs with €600 grand to spend buying in SoCo Dublin don't need help, well not the financial kind anyway. Limiting it to 300K means it will hit where genuine assistance is required and won't push prices in areas which are already overheating.

The more I hear about this scheme to more I like it. It's a bit of a bugger it's a rebate right enough.

68 lost souls

MarkAnthony wrote: »

There are plenty of properties in Dublin under 300K including 3 beds. The government should be applauded for continuing to push areas which have seen significant regeneration and some gentrification over the years as more buyers have moved into these areas.

FTBs with €600 grand to spend buying in SoCo Dublin don't need help, well not the financial kind anyway. Limiting it to 300K means it will hit where genuine assistance is required and won't push prices in areas which are already overheating.

The more I hear about this scheme to more I like it. It's a bit of a bugger it's a rebate right enough.

It is specific to new bulds though and not much new bulids happening in Dublin below €350,000 especially in any area of South Dublin. The only property in South Dublin in the last year this would effect is a 2 bed apartment in Carrickmines or Ely Woods in Rathfarnham. All of which sold out almost instantly anyway.

Chances are a fist time buyer isnt spendin €600,000 which I would love to be able to spend as it might get close to the area we would love but aint gonna happen probably in my life time.

Also as mentioned they are 2 bed apartments which aren't suitable for a 2.5 children family home that a lot of first time buyers are looking to have.

MarkAnthony

68 lost souls wrote: »

It is specific to new bulds though and not much new bulids happening in Dublin below €350,000 especially in any area of South Dublin. The only property in South Dublin in the last year this would effect is a 2 bed apartment in Carrickmines or Ely Woods in Rathfarnham. All of which sold out almost instantly anyway.

Chances are a fist time buyer isnt spendin €600,000 which I would love to be able to spend as it might get close to the area we would love but aint gonna happen probably in my life time.

Also as mentioned they are 2 bed apartments which aren't suitable for a 2.5 children family home that a lot of first time buyers are looking to have.

Sorry missed that - you're bang on.

Okay I'll join the hate this **** party now :pac:

Seriously this had major potential but it's just stupid limiting it to new builds.

The_Conductor

MarkAnthony wrote: »

Sorry missed that - you're bang on.

Okay I'll join the hate this **** party now :pac:

Seriously this had major potential but it's just stupid limiting it to new builds.

If you don't limit it to new builds- you simply have money chasing pre-existing limited housing stock.

To be brutally honest- I feel a hell of a lot more sorry for suckers who bought into the starter home argument 10-15 years ago- and are stuck in wholly inappropriate accommodation- trying to bring up kids in apartments, miles away from anywhere, no facilities or amenities in the vicinity etc etc.

The new developments have to have facilities and amenities come on stream along with the development- not afterwards- to try and stop the bleak half inhabited ghost estates that have absolutely nothing for their residents.