DUBLIN (Reuters) – Ireland’s governing Fine Gael party will boost a government subsidy for first-time home buyers if re-elected next month, Prime Minister Leo Varadkar said on Monday, seeking to sway voters on one of the key election issues.
House prices have stabilised in Ireland over the last year after recovering rapidly from a real estate crash a decade ago. However rents that are as much as 40% above the peak hit during the preceding boom have limited prospective buyers’ ability to save a deposit to buy their first home.
In 2016 the Fine Gael-led government introduced the help-to-buy scheme, providing first-time buyers with a tax rebate of up to 20,000 euros, or 5% of the value of a property if they were buying a newly built home.
It extended the scheme to the end of 2021 in October’s budget and has said 16,000 home buyers have benefited from the tax break.
“We’ve tried this scheme, we know it works and we want to enhance that now and make it better so that you can get up to 10% of the value of the property back in terms of rebate up to 30,000 euros,” Varadkar told the Today FM radio station.
“That will help a lot more people to raise a deposit. I meet people all the time who are in this kind of rent trap, where they may have a decent income but they are paying rent, paying for childcare and paying a lot of income tax and are not able to afford to save or can save only a very small amount.”
Ireland’s main opposition party, Fianna Fail, has said it will outline a new scheme this week where the state would top up the savings of first-time home buyers, in conjunction with the help-to-buy scheme.
Fianna Fail opened up a 12-point lead over Varadkar’s fellow centre-right party in an opinion poll on Sunday in stark contrast to other recent polls that either showed the parties neck-and-neck or Fine Gael slightly ahead.
(Reporting by Padraic Halpin; editing by Nick Macfie)