Fianna Fáil Senator Thomas Byrne has described the Tanáiste Joan Burton’s apparent last minute conversion to the difficulties of families trying to purchase their first home as entirely lacking in credibility. He was speaking following remarks made by Joan Burton about the need to “facilitate” young people and others to buy their first home.
Senator Byrne commented, “Over the four years government policies have made it increasingly difficult for first time buyers:
• Mortgage interest relief has been abolished for new home buyers costing families up to €4,000 a year;
• The Local Property Tax has increased the cost of home ownership;
• The scandal of high variable mortgage rates has been allowed to continue;
• A 7 year exemption from capital gains tax gave investors a huge advantage over owner occupiers;
• A lucrative tax regime for Real Estate Investment Trusts has also put families looking to purchase a home at a disadvantage;
“In July, Fianna Fáil was provided with figures which show that just 47 people have qualified to date for the government’s scheme to provide relief from DIRT for first time buyers. The reality is that this was little more than a gimmick and of real benefit only to cash rich property investors. The actual benefit is a fraction of what first time buyers used to get from mortgage interest relief and in most cases will be less than their property tax bill. Only €2.8m is being set aside for the scheme, an average of €294 for each first time buyer. This is only a drop in the ocean in terms of the costs of affording your first home.
“While we support sensible deposit requirements for first time buyers of 10% on houses up to €220,000 the application of rules for non-first time buyers has had a knock on effect on the supply of starter homes. A much tougher approach was adopted in relation to non-first time buyers requiring them to have a full 20% deposit.
“The Government’s policy seems to be driven by a determination to impose European rates of home ownership in Ireland. In doing so, they are completely ignoring existng demand and the legitimate aspiration of most people in Ireland to own a home suitable for their family needs. This is leading to an entire generation of people being trapped in houses and apartments which are no longer suitable for their needs even though they have demonstrated a clear capacity to meet their existing mortgage payments. Inevitably this has a knock on effect on the supply of housing units for first time buyers.”
Fianna Fáil’s proposals offer genuine help for first time buyers:
• Using the Strategic Investment Fund and Strategic Banking Corporation to launch public and private housing initiatives with a target of 150,000 new homes in the lifetime of a new Fianna Fáil government;
• Introducing a 25% top up First Time buyers Savings Scheme;
• Providing a new Right to Buy scheme for local authority and Voluntary Housing Association tenants;
• Boosting housing supply by revising planning laws;
• Shaking up the mortgage market by expanding credit union lending.