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Extra.ie
5 days ago
- Business
- Extra.ie
Revenue will target estate agents found ‘scamming' Help to Buy
Revenue will investigate real estate agents who attempt to 'scam' the Help to Buy (HTB) scheme, Minister for Housing James Browne has warned. It comes after estate agent Sherry FitzGerald reportedly told a couple the price of a home had been split into two payments in order to bypass the rules of the subsidy scheme. The HTB scheme offers first-time buyers the chance to claim back €30,000 from their income tax on properties where the value is above what they can afford under Central Bank lending rules, but only on properties valued at €500,000 or less. Revenue will investigate real estate agents who attempt to 'scam' the Help to Buy (HTB) scheme, Minister for Housing James Browne has warned. Pic: File According to reports, a Limerick estate agent offered to split the cost of a property valued at €525,000 in two – a €500,000 payment for the house and an extra €25,000 in 'flooring costs'. This allowed the couple to avail of the HTB scheme under a falsified home value of €500,000, The Irish Times reported last week. Yesterday, Minister Browne warned: 'Anybody scamming that system, Revenue Commissioners are going to investigate that because that is a scam.' He added that splitting of house prices to bypass the cap was 'absolutely unacceptable'. 'It is outside of the terms of that agreement,' he told RTÉ's The Week In Politics. Revenue will investigate real estate agents who attempt to 'scam' the Help to Buy (HTB) scheme, Minister for Housing James Browne has warned. Pic: Stephen Collins / Collins Photos The Fianna Fáil TD warned that 'people are taking very high risks in terms of effectively defrauding the system'. The Property Services Regulatory Authority (PSRA) has said it has the power to issue minor and major sanctions, including suspensions and fines, to people attempting to bypass the HTB cap. The PSRA told the Irish Examiner it encourages 'first-time buyers who are approached by estate agents to enter into this practice to make a complaint to the PSRA'. Following the report, a Sherry FitzGerald spokeswoman told The Irish Times: 'At this point, we believe that this is an isolated incident relating to a single property.' She confirmed Sherry FitzGerald would be launching a formal investigation into the matter, adding: 'Following the conclusion of our investigation, we will take whatever steps are necessary to ensure that such a situation cannot occur again.' In the first four months of the year, 17,144 applications were received for the Help To Buy the first four months of the year, 17,144 applications were received for the HTB scheme. There were 5,000 more than in the same period of 2024. Minister Browne also addressed concerns about decreases in employment in the construction sector. The Business Post reported yesterday that construction firm MKN Property Group has cut more than half its workforce because it has 'run out of work'. Labour housing spokesman Conor Sheehan said: 'We have apprentices at the moment who are still on sub-minimum wage… We need to do a huge job in workforce planning, in terms of scaling up the construction industry.' Mr Browne called the issue a 'funny balance', saying: 'If you increase pay too much you will end up with less apprentices.' Eoin Ó Broin, Sinn Féin housing spokesman, told the minister: 'The problem isn't a skills shortage, it's how you're handling this.' Minister Browne also fielded questions on the limitations of Uisce Éireann. Eoin Ó Broin, Sinn Féin housing spokesman, told the minister: 'The problem isn't a skills shortage, it's how you're handling this.' Pic: Leah Farrell/ The utility provider has repeatedly warned it does not have the capacity to connect proposed housing projects to the water pipeline. Minister Browne was asked why Uisce Éireann has no statutory obligation to provide water infrastructure for new housing projects. Rory Hearne, Social Democrats housing spokesman, called for statutory guidelines to be provided to Uisce Éireann, saying: 'The Government has to give them that, in terms of actually saying they have a responsibility as well.' The minister responded: 'There is no point in having statutory guidelines if a body doesn't actually have the capacity to do so; what we're doing is actually giving them the capacity. 'We're going to give them more funding specifically ringfenced to deliver the housing infrastructure we need'. Minister Browne was reluctant to provide more details on the funding except to say that specifications would be outlined in the National Planning Framework, the National Development Plan, and his own housing plan. He wouldn't give a timeline but insisted it would be new money not previously announced.
The Journal
6 days ago
- Business
- The Journal
Why boosting the Help to Buy scheme misses the bigger problem with housing policy
IRELAND HAS LEARNED a lot of lessons from the Celtic Tiger era. One we've chosen to forget is around first time buyer grants. There were calls during the week to expand the threshold for the Help to Buy (HTB) scheme. The initiative gives prospective house buyers a tax rebate of up to €30,000 when buying new build properties. The scheme only applies to homes valued at up to €500,000. Why the scheme functions this way is simple. 1: It's meant to incentivise the construction of new homes. If people have more buying power when getting a new build, in theory, developers should construct more of them. 2: The cap is to make sure developers don't start pulling the proverbial. HTB is meant to be targeted at struggling first time buyers, not well-off folks getting larger, more expensive homes. At least, all of this is the theory. In practice, there are lots of problems with the scheme, which we'll get into later. But in concept at least, that's how it's supposed to work. Which makes a request during the week from Savills slightly odd. The real estate agent called for the government to increase the HTB threshold to €621,000. This would allow people to buy more expensive new build properties, while still getting the €30,000 tax refund. Savills said increasing the threshold is needed because, in Dublin, the average price by first-time buyers for new properties is €515,000. 'This means more and more new homes are simply out of reach under the current help-to-buy limit,' the company said. It argued the threshold should be raised by 24% to €621,000. The company said this would take account of inflation since 2017, the year HTB was introduced. It's a call the government could pay heed to. After all, it has extended HTB until 2029 against the advice of multiple experts and economists . But experts have said it shouldn't, and increasing the threshold would just be a waste of taxpayer's money . A popular scheme that misses the mark So, what's the problem here? The most obvious problem is cost. HTB is already much more expensive than ever envisaged. When introduced in 2017, it was expected the scheme would cost about €40 million per year. By 2021, actual spending had ballooned to €190 million annually. It's almost certainly running above €200 million now. Increasing the threshold would mean raising this spend even higher. The real cost of 'help' The increase in spending would be ok if the scheme was effective. To see if that's the case, we come back to the fundamental question – what is the point of HTB? The cuddly language used around the scheme normally emphasizes how it is a financial support to first-time house buyers. How it helps them get on the property ladder. But that wasn't the point of HTB. If it was, it would be available to anyone buying any property, not just new builds. The point of HTB, at least originally, was to stimulate housing construction. The idea was that by making it easier for people to buy new-build homes, developers would construct more. That's why HTB doesn't apply to second-hand properties. Stimulating supply, or just spending? So, if working properly, HTB should increase the overall supply of properties, easing Ireland's housing supply shortages. Advertisement Seems simple. But is it doing that? Are we getting a good return on the hundreds of millions of euro we spend every year? The answer is – we don't know. Because, unfortunately, there is often a fixation on whether HTB is driving up house prices or not. There's a decent chance it is. A few different studies have said they suspected it . But it's incredibly hard to prove a direct link between a single thing and house price movements. The fact that it's a question at all around HTB is a bad sign. But that constant fixation has distracted from the main point of HTB – is it delivering more homes? Well, let's see what an Oireachtas review had to say . 'There is no clear method which could show the number of additional units arising from the HTB scheme, as opposed to those which would have been delivered anyway.' Well, pretty black and white. So, if HTB costs lots of money, and we don't know it's effective, why are we still pouring hundreds of millions a year into it? The most obvious answer is because people like it. Users of the scheme like getting a tax refund. Politicians can point to it and say they're helping to get people on the property ladder. And developers / estate agents / etc are obviously happy that buyers are given extra firepower to pay more for a property. Darragh O'Brien, the previous Housing Minister, responded last year to calls to scrap HTB . He said doing so would 'damage home building and home buying'. But there's no evidence HTB helps home building. And if it was scrapped, would demand for new housing drop to a point where developers would struggle to sell new homes? Judging by the queues outside new build developments, there's little evidence of that either. But this exposes a dissonance at the heart of Irish housing policy. And it's something which can be genuinely hard to wrap your head around. What's good for the individual, is not necessarily good for the broader group. Multiple studies have pointed out that lots of people using HTB don't really need it. Somewhere between a third and half the number of claimants would likely have been able to buy a property anyway. Who's Really Being Helped? So if that's the case, why are we giving them a tax rebate? Some would argue that it's a way to give back to hard-pressed workers. But if that's the goal, why give a tax refund to this one particular group? Lots of workers are hard-pressed – those who are in a position to buy a home without needing HTB are far less likely to fall into this category. There is also an argument that recipients are happy as it dramatically lowers the amount they need upfront for a deposit. But then that begs the question – why have rules around deposits at all? Why do we normally get people to pay this money up front? The answer, of course, is that because tighter lending limits were introduced to stop a return to Celtic Tiger-era style lending. We all saw the result of 100% mortgages – disaster. HTB is essentially the government helping a group of people sidestep the deposit rules. A group where many don't need the help at all. The people who really need the help are the ones who can't really avail of HTB – single applicants and those on lower incomes. The scheme is one which disproportionately benefits people who are already better off. While it might be great for those who get it, it's not doing much for wider society. There's no evidence it helps get more homes built, it costs far more than budgeted, and many applicants could do without it. Any calls to pour extra cash into this particular money pit should be taken with several healthy bags of salt. Readers like you are keeping these stories free for everyone... A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation. Learn More Support The Journal
Irish Examiner
01-07-2025
- Business
- Irish Examiner
Effort to bypass help to buy scheme being examined, says housing regulator
Ireland's property regulator said it is examining a report that a potential home buyer was asked to pay €25,000 for flooring in order to bypass the cap on the help to buy scheme. The Property Services Regulatory Authority (PSRA), which licences and regulates auctioneers and estate agents, said it was not aware of such practices taking place, but encouraged any first-time buyers who were faced with such an incident to lodge a formal complaint. The Irish Times reported yesterday that a prospective home buyer contacted estate agents Sherry FitzGerald, asking if the developer of a new estate would consider selling a home for €500,000 so it would qualify for the help to buy scheme. The agent said it would not qualify for the scheme as it is priced at €525,000 and above the €500,000 cap. The agent subsequently contacted the buyer, saying the price of the home had been split so that it qualified for the scheme, with the house costing €500,000 and the flooring in the home costing €25,000. Reacting to the report, a spokesperson for the PSRA said it has the power to issue minor and major sanctions, including suspensions and fines. 'The PSRA was not aware of the practice of estate agents assisting developers circumvent the help to buy (HTB) scheme by asking first time buyers for the excess of €500,000, which is the limit under the HTB scheme, in cash,' they said. The PSRA would encourage first-time buyers who are approached by estate agents to enter into this practice to make a complaint to the PSRA [and] include all relevant evidence. Contacted by the Irish Examiner, Sherry Fitzgerald said it has launched an internal investigation. 'At this point, we believe that this is an isolated incident relating to a single property. Our client is not privy to any negotiations with any prospective buyer. 'Following the conclusion of our investigation, we will take whatever steps are necessary to ensure that such a situation cannot occur again.' Administered by the Revenue Commissioners, the scheme provides a refund on income tax of up to €30,000 to first-time buyers on new-build properties up to a value of €500,000. For a property to qualify under the scheme, it must be purchased or built as the first-time buyer's home and, if purchased, it must be purchased from a qualifying contractor. The tax refund is paid directly to the contractor. In the first four months of 2025, some 17,144 applications were received for the scheme — almost 5,000 more than in the same period in 2024. Contacted by the Irish Examiner, the Department of Housing referred questions to the Department of Finance, which referred the matter to Revenue. In a statement, Revenue said it could not comment on individual cases but said the €500,000 threshold includes all payments made in connection with the property. 'Splitting payments, omitting costs, or structuring arrangements to artificially remain below the threshold constitutes non-compliance,' Revenue said, adding that a range of sanctions could be imposed.
Irish Examiner
26-06-2025
- Business
- Irish Examiner
Stamp duty of 2% needed to unlock stalled housing investment, says Savills
The Government need to revert commercial stamp duty from 7.5% back to 2% to unlock stalled investment and accelerate its housing delivery, Savills Ireland has said. Publishing its pre-budget submission, the property advisor warned that persistently high transaction costs are dampening investment in the commercial property sector, while buyer supports that haven't kept pace with inflation are making it harder for first-time buyers to access new homes. It is also recommending the Government update the Help-to-Buy (HTB) scheme threshold from its current €500,000 cap to at least €621,000, reflecting the level it would be today if it had kept pace with inflation since the scheme's introduction in 2017. Consumer inflation has surged by 24.2% in that time, Savills said, but the threshold has remained unchanged which it says has eroded the scheme's effectiveness. "Reverting commercial stamp duty to 2%, as it was between 2011 and 2017, would send a strong signal that Ireland remains a competitive, investor-friendly location," said Mark Reynolds, Managing Director of Savills Ireland. "At a time when international capital is more selective, cost matters, and so does confidence." Ireland currently has one of the highest commercial property transfer taxes in Europe, making it less attractive for investors compared to peer markets, Savills warned. "For example, at a 7.5% rate, an investor acquiring a property yielding just 3.75%, effectively loses two full years of rental income to stamp duty," it added. 'This means more and more new homes are simply out of reach under the current HTB limit,' said Mr Reynolds. 'Updating the threshold to align with inflation will directly support buyers and help maintain a pipeline of viable new housing supply in urban areas where demand is highest." In addition to stamp duty and the HTB scheme, Savills is also calling for Uisce Éireann's statutory remit to be expanded to enable the proactive delivery of water infrastructure, and is urging the Government to update Ireland's construction labour modelling to reflect the reality of the stated 50,000-unit annual housing target, alongside investment in training and guarantees that apprenticeships are completed within four years.
Yahoo
25-06-2025
- Business
- Yahoo
Hampshire Trust Bank supports MS Lending Group with $47.6m in funding
UK-based Hampshire Trust Bank (HTB) has extended a £35m ($47.6m) funding facility to MS Lending Group, aimed at enhancing its lending capabilities within the UK bridging market. The funding will cover residential, commercial and semi-commercial projects, boosting MS Lending Group's resources and supporting its growth ambitions. MS Lending Group plans to utilise this facility alongside its existing funding arrangements, providing an increase in its lending capacity. MS Lending Group CEO Michael Stratton said: 'This £35m facility from HTB is a major step forward for our business. It not only strengthens our capacity to meet growing demand but also reinforces our position as a serious player in the bridging market. We value our relationship with HTB and are excited to deepen this partnership as we continue our growth journey.' Hampshire Trust Bank's wholesale finance managing director Paul Maurici added: 'We are delighted to extend this facility to MS Lending Group. They are a dynamic, forward-thinking lender, and this expanded funding line reflects our confidence in their team, their strategy, and their future growth.' In January, One Stop Business Finance (OSBF) secured a £10m facility from HTB to support its growth. This funding aimed to expand OSBF's loan book, enabling the company to offer its flexible funding solutions to more small and medium-sized enterprises across the UK. OSBF specialises in custom-made financing options, offering services such as working capital solutions, revolving credit facilities, bridging, and development loans. In October 2024, HTB closed its asset finance division to new business, impacting vehicle stocking. The strategic decision was made to optimise the use of HTB's regulatory capital, which has been diminishing due to the bank's rapid expansion. "Hampshire Trust Bank supports MS Lending Group with $47.6m in funding " was originally created and published by Leasing Life, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
