Dáil Éireann Debate, Tuesday - 20 January 2026
407. Deputy Séamus McGrath asked the Tánaiste and Minister for Finance to consider amending the help-to-buy scheme to reduce the 70% rule whereby a purchaser must be borrowing 70% of the purchase price of the house (details supplied). [4370/26]
Amharc ar fhreagraThe Help to Buy (HTB) incentive, is a scheme to assist first-time purchasers with the deposit they need to buy or build a new house or apartment. The incentive gives a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous four years, subject to limits outlined in the legislation.
The level of support available to first time buyers under the HTB scheme, is whichever is the lesser of:
• €30,000; or
• 10 per cent of the purchase price of the new property; or,
• the amount of Income Tax and DIRT paid in the four years before application for the relief.
One condition of the scheme is that a qualifying first-time purchaser (“FTP”) must take out a loan in an amount equal to at least 70 per cent of the purchase value of the property. In the case of a self-build property, the purchase value is the approved valuation of the self-build property, as approved by the lender in accordance with the Central Bank’s macro prudential rules. These rules stipulate the valuation should include the site value.
The HTB scheme, was initially intended to be limited to persons who had mortgages with a minimum Loan to Value ratio (LTV) of 80 per cent. However, Central Bank data indicated that a sizable number of first-time buyers take out a mortgage with a LTV of less than 80 per cent. As such, it was decided to amend the scheme to set the minimum LTV at 70 percent so as to ensure that first-time buyers did not feel compelled to borrow larger amounts than they would have otherwise in order to qualify for the scheme.
Individuals who are in the position of being able to avail of a mortgage at a lower LTV than 70 per cent are considered to have sufficient resources to meet the deposit requirements of the macro prudential rules and thus less in need of assistance from the Exchequer. Lowering the LTV ceiling would therefore only increase deadweight in the scheme. In fact, the independent review of the scheme which took place in 2022 recommended that the LTV be increased to 80 per cent for purchasers availing of HTB.
As the Deputy will appreciate, decisions regarding taxation measures are made in the context of the annual Budget and Finance Bill processes, at the appropriate time, having regard to the sound management of the public finances and the impact any proposed changes would have on the broader housing market.
