Savills Ireland welcomes the government's extension of the Help-to-Buy (HTB) scheme until 2029, but views the decision not to raise the property value threshold in Dublin as a missed opportunity.
With only a small percentage of new developments in Dublin eligible for the scheme (properties that cost €500,000 or less), first-time buyers face limited options.
Since the HTB scheme’s launch, over 47,000 claims have been supported, but rising construction costs and consumer inflation, which has increased by 21.2% since 2017, mean the current threshold no longer reflects the realities of today’s housing market, particularly in high-demand areas.
Savills Ireland had proposed raising the threshold to €614,000 in Dublin, which would have better supported first-time buyers, improved market access, and stimulated further development.
Stamp Duty Increase May Erode Investor Confidence
Savills Ireland also raises concerns about the stamp duty increase on bulk purchases of residential properties from 10% to 15%.
Savills highlights that the increase will not significantly divert supply to the private or first-time buyer (FTB) market, given that recent planning legislation already restricts block sales of residential units.
The proposed stamp duty increase, therefore, will have limited impact in terms of boosting housing availability for first-time buyers, and it risks exacerbating an already challenging environment for institutional investors.
Institutional investor confidence in Ireland has been on the decline in recent years, partly due to rent caps that restrict annual rental increases to 2%, which is significantly below international standards. This stamp duty hike could further destabilise investor sentiment in the Private Rented Sector (PRS) and inadvertently lead to a reduction in much-needed rental stock.