DNG Duffy in Dundalk welcomes extension of Help to Buy scheme

DNG welcomes extension of Help to Buy scheme, but measures aimed at supporting small landlords will do little to stop their exodus from the rental sector agency says.

Reacting to the measures announced in Budget 2024 Paul Murgatroyd, Director of Research with leading property group DNG, welcomed the decision to extend the Help to Buy scheme by a further year until 31st December 2025 and the schemes amendment to include properties purchased under the local authority affordable purchase scheme which is significant due to the increased volume of new units under construction going to this sector.

In addition, DNG welcomed the move to increase the rent tax credit to €750 per annum and extend the eligibility to include the parents of students living in rented accommodation as well as the limited reintroduction of mortgage interest relief for a temporary period next year.

However, the agency has warned that the newly announced Rented Residential Relief for landlords will do little or nothing to incentivise small landlords to remain in the sector in the medium term.

Commenting on the announcements contained within the Minister’s Budget speech, Murgatroyd said: “We very much welcome the decision to extend the Help to Buy scheme for first time buyers of new homes for a further year until the end of 2025.

"The scheme’s extension will provide continued valuable financial assistance to this cohort of buyers, and this in turn will bring further certainty to the new homes market, allowing developers to continue delivering more new units, in the knowledge that this purchaser support scheme will continue for the next two years at a minimum. “

He continued “However with regard to the newly introduced Rented Residential Relief, the extent of the relief available will do little or nothing to convince small landlords to remain in the rental sector.

"The relief available, as set out in the Budget, is equivalent to a tax credit for landlords of a maximum of €600 in year one rising to €1000 in year’s three and four of the scheme’s operation, which will end in 2027.”

He further added, “in addition, if the property on which relief is granted does not remain in the rental sector for the full term of the scheme the full amount of relief granted will be clawed back.”

Giving his reaction to Budget 2023 and the introduction of Rented Residential Relief, DNG Chief Executive Keith Lowe said, “the relief, as announced, actually has the potential to push more small landlords out of the market in the coming weeks and months, as some landlords have been delaying the sale of investment properties until after today’s budget was announced, in the hope of more favourable tax treatment in the months and years ahead.

"In light of the limited relief now available, many of these landlords will undoubtedly press ahead with sales of rental properties, thereby further reducing the amount of rental stock available in the market.

Lowe also expressed disappointment that a wider review and revision of the taxation regime facing small and medium sized landlords was not announced in the budget, adding that “by not committing to any future measures to support landlords, the government has missed a golden opportunity to stem their exodus from the rental sector.”

Locally DNG Duffy Managing Director Keith Duffy echoed the enactment of the DNG CEO’s comments and welcomes the extension of the Help to Buy Scheme which plays a vital role for buyers.

"Finally the Increase in vacant homes tax from three to five times the property’s existing basic Local Property Tax rate may bring more properties’ to market." 

Link to article on research page here.