662. Deputy Peter Roche asked the Tánaiste and Minister for Finance if he will assess the impact that the current help to buy scheme eligibility criteria are having on the delivery of one-off rural housing by first-time buyers; and if he will make a statement on the matter. [59049/26]

663. Deputy Peter Roche asked the Tánaiste and Minister for Finance whether consideration is being given to proposals that would ensure that applicants constructing homes in rural areas are not excluded from the help to buy scheme solely because the valuation of the completed dwelling exceeds the actual construction cost; and if he will make a statement on the matter. [59050/26]

I propose to take Questions Nos. 662 and 663 together.

The Help to Buy (HTB) incentive, is a tax-based scheme to assist first-time purchasers with the deposit they need to buy or build a new house or apartment.  It also aims to encourage additional supply of new houses by supporting demand.

HTB provides 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% 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.

For a property to qualify for the HTB scheme, it must be new or converted for use as a dwelling, having not previously been used as a dwelling. Additionally, the purchase value/approved valuation of the property must not exceed €500,000.

Based on the latest available data (30 June 2026), the scheme has supported over 67,000 individuals or couples to buy or build their own home.

The Programme for Government commits to the retention and revision of the Help to Buy scheme; and to continue to support one-off self-builds through the Help to Buy Scheme and the First Home Scheme.

Details of the scheme HTB scheme are set out in section 477C of the Taxes Consolidation Act 1997 (TCA). It states that in order to be eligible to make a HTB claim, an applicant must have either:

• entered into a contract with a qualifying contractor for the purchase of a qualifying residence, that is not a self-build qualifying residence, or

• drawn down the first tranche of a qualifying loan in respect of a self-build qualifying residence.

The claimant must take out a loan in an amount equal to at least 70% of the value of the property.

The “purchase value/approved value" of a property must not exceed €500,000.  Section 477C(1) TCA defines “purchase value” as:

• in the case of a qualifying residence, the price paid for the qualifying residence, being a price that is not less than its market value, or

• in the case of a self-build qualifying residence, the “approved valuation.”

An “approved valuation”, in relation to a self-build qualifying residence, is defined by section 477C TCA as the valuation of the residence as approved by the qualifying lender at the time the qualifying loan is entered into. This valuation is determined by the qualifying lender in accordance with the Central Bank’s macro-prudential rules. These rules stipulate the valuation as being the lower of the market value of the site plus the cost of construction or the lender's projected market valuation of the property upon completion.

The HTB scheme, was initially intended to be limited to persons who had mortgages with a minimum LTV of 80%. However, Central Bank data indicated that a sizable number of first-time buyers take out a mortgage with a LTV of less than 80%. As such, it was decided to amend the scheme to set the minimum LTV at 70% 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. Indeed, the Central Bank macro-prudential rules also limit mortgage borrowing in order to protect borrowers.

Individuals who are in the position of being able to avail of a mortgage at a lower LTV than 70% 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.

A number of reviews on HTB have been undertaken focusing on a range of broad issues including LTV. In 2017 an independent review of the Help to Buy incentive was completed and published. In 2018 an independent Cost Benefit Analysis (CBA) of the Help to Buy incentive was carried out and published.  An independent review of the HTB scheme conducted by Mazars took place in 2022 and was published on Budget Day that year.  Indeed, the 2022 review recommended that the LTV be increased to 80% 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 commitments set out in the Programme for Government and the impact any proposed changes would have on the wider housing market. It is a long-standing practice of the Minister for Finance not to comment in advance of the Budget on any tax matters which might be the subject of Budget decisions.

As with all such schemes HTB is kept under review.