Budget 2020 took place this afternoon but what exactly does it mean for the property market here?
In total Finance Minister Paschal Donohoe announced what he described as “an unprecedented level of funding” worth €2.5 billion to the Government’s Housing Programme.
The key points included:
- Help to Buy Scheme extended for another two years until the end of 2021
- Capital funding of more than €1.1 billion announced to deliver 11,000 new social homes in 2020 with a further 12,000 social housing units to be delivered in 2021.
- Living City Initiative extended to the end of 2022
- Stamp duty on commercial property purchases up from 6% to 7.5%
- The Capital Acquisitions Tax threshold has increased from €320,000 to €335,000 for gifts or inheritances between parents and children
- Almost €2 million in additional funding allocated to the Residential Tenancies Board to support their increased powers to investigate and sanction non-compliance with Rent Pressure Zone measures
- €80 million provided for the Housing Assistance Payment Scheme next year
- New anti-avoidance measures announced aimed at Irish Real Estate Funds
- A further €20 million allocated for homeless services, bringing the total for 2020 to €166 million.
- Government to engage with the credit union movement on appropriate mechanisms for them to establish a vehicle to invest in approved housing bodies.
The most interesting point in Budget 2020 from a first-time buyer/estate agent’s perspective was the extension of the Help to Buy Scheme for another two years until the end of 2021.
Minister for Finance Paschal Donohoe noted that about 15,000 new homes had been bought or built by first-time buyers under the scheme since its introduction.
The Minister also confirmed an extension to the Living City initiative up to the end of 2022.
Under measures in Budget 2020, the Minister said he was raising the rate of stamp duty on non-residential property by 1.5% from tonight.
He said the commercial property market is performing strongly and he expects the increase can be borne without any significant impact.
The Capital Acquisitions Tax threshold has also increased from €320,000 to €335,000 for gifts or inheritances between parents and children at a full year cost of €11.2 million.
On social housing, Mr Donohoe is allocating capital funding of over €1.1 billion to build over 11,000 new social homes next year with a further 12,000 units planned for 2021.
Mr Donohoe also said he will provide an additional €80m for the Housing Assistance Payment scheme next year, which will support 15,750 new tenancies as well as support existing tenancies getting the payment.
To help with the provision of new affordable homes, an extra €17.5m is being provided to the Land Development Agency, the Minster also said.
€186m is also being allocated to the Serviced Site Fund and Local Infrastructure Housing Activation Fund in 2020.
On the still too high level of homelessness, the Minister said he has allocated another €20m for services, which will bring total funding to €166m next year.
Mr Donohoe also said that the high cost of renting remains a concern for the Government and to this end it has introduced 44 rent pressure zones around the country.
“I am providing almost €2m in additional funding to the Residential Tenancies Board to support their increased powers to investigate and sanction non-compliance with rent pressure zone measures,” he told the Dáil.