DNG makes three key recommendations to Minister in its Pre-Budget Submission ahead of Budget 2022.......

RECOMMENDATION 1:
Extend the temporary enhancement to the Help To Buy (HTB) Incentive Scheme to
December 2024

The enhanced Help To Buy (HTB) incentive scheme for first time buyers is due to end on 31st December 2021, having been extended as part of the July Stimulus package in 2020. We believe the scheme is playing a vitally important role in increasing supply in the new homes sector and needs to continue for a further three years until 31st December 2024.

The latest Revenue data to the 31st of July 2021 shows that since the scheme's inception, 69,163 applications to the scheme have been made, resulting in 26,744 approved claims for purchased properties or self-builds. 26,254 applications have been made so far in 2021 resulting in 4,522 claims, highlighting the importance of the scheme to the new homes market. This is particularly true in the Dublin market, where affordability issues are at their greatest, and this has
resulted in 7,150 HTB claims in Dublin since the scheme began.

Whilst the government recently published the Housing for All plan includes a commitment under action 1.12 to consider the extension of the scheme in the context of the upcoming Budget, we would strongly recommend that the enhanced HTB initiative scheme is extended until 31st December 2024 in the context of improving affordability and increasing the supply of new housing output.

RECOMMENDATION 2:
Extend and revise the Living City Initiative

More efficient use of the stock of existing buildings in the State is one method of increasing housing supply, reducing vacancy rates, and improving sustainability. The repurposing of vacant premises for residential use is an important component in ensuring the future sustainability of urban areas and we believe that a redesign of the Living City Initiative (LCI) could play an important role in bringing vacant buildings and space above retail premises into residential use.

In formulating their latest Develop plan for Dublin 2022-2028, Dublin City Council identified more than 4,000 empty spaces above retail units in the capital that have the potential to be used as residential space. Financial incentives should be provided and building regulation requirements addressed to allow ease of adaptation of the upper floors of buildings in the city and conversion to residential use.

In this regard DNG are calling for a widening of the Living City Initiative and an extension of the scheme to December 2024. The designated Special Regeneration Areas (SRA’s) under the LCI should be reviewed and widened, to include more city-center locations and other urban areas across the country. In addition, the current ceiling of €200,000 for tax relief under the rented residential relief scheme should be removed, and tax relief granted at 80% of all qualifying
expenditures. We also recommend that the requirement that any residential property being renovated must have been built before 1915 should be removed and brought in line with the rules governing other types of properties with no age condition attached.

RECOMMENDATION 3:
Encourage Home Ownership by the reintroduction of Mortgage Interest Relief

As the Housing for All plan acknowledges, homeownership is essential in Ireland and should be encouraged. As the plan states, “Putting Homeownership back within reach of the ‘squeezed middle’ and breaking the rent trap are core goals of Housing for All. At present, there is a worrying trend in the declining rate of homeownership across the state. Census results show that homeownership rates declined from 79.7% in 2002 to 68.7% in 2019 and the percentage share of
rented properties grew.

Policies need to be introduced to support homeownership as the cost of renting in Ireland for an average-priced property is nearly 40% higher than owning a property. Confining people to long-term rental accommodation is not advisable and when those who are renting reach retirement age, affordability will become challenging for the majority of renters, and the State will be required to assist. To encourage homeownership, we are proposing that the government reintroduce mortgage interest relief for first-time buyers as an incentive for them to buy. In addition, this will also free up much-needed accommodation in the private rented sector.