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The Help to Buy Incentive

The Help to Buy (HTB) Incentive

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The Help to Buy (HTB) incentive is a scheme introduced in 2014 aimed at assisting first time buyers in getting a foothold on the property ladder and helping them to navigate the newer and stricter mortgage rules for prospective homeowners. The scheme is intended to help first time buyers with the deposit needed to build or purchase a new home. The scheme will give you a refund of the Income Tax and DIRT paid over the previous four years which is then used as the partial or full deposit.

 

The scheme has undoubtedly already helped many first-time buyers purchase their homes, but it has also come under fire in recent months as it has been suggested that the scheme has driven up house prices, thereby excluding more prospective buyers from the market. It has also been suggested that the scheme has aided many who were not in fact relying on it, and who already have the means to purchase their home.

 

This scheme was not only extended to the end of 2021 but enhanced in the July Stimulus plan and now allows for first time buyers to claim back the lower of either 10% of a property’s value or €30,000. For homes purchased after January 1st, 2017, the refund will be paid directly to the contractor.

 

Applications for the scheme must be made online via the myAccount or Revenue Online services.

 

We advise checking the Revenue website for information on contractors and developers taking part in the scheme as a first port of call. Should you have any queries please don’t hesitate to contact us.

Landlords – New Notice Periods to be Aware of

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Although this June weather may not be what we had all expected, something you can always rely on us here at EcovisDCA to continue to bring you information which is vital to your business and financial lifestyle. This week we will be continuing in our series of posts detailing the new changes to rental legislation recently announced and put into place. Legislation can often be a bit of a minefield and with so many changes to the rental sector, we want to ensure that our clients and friends are well informed. This week we will be focusing on the new notice periods which have been put in place for landlords as well as the new introduction of remedial notices.

As of June 4th, 2019, the notice periods that a landlord must provide to a tenant when serving a notice of termination have been extended. It is vital that all landlords, regardless of their experience levels or how long they have been renting should keep a record of the below and familiarise themselves with these new requirements as any failure to serve the correct notice can result in the notice being rendered invalid. Changes can be agreed between both tenant and landlord, but this can only be done once the official termination letter with the appropriate notice period has been served. Below is a list of the new notice period requirements which will now be dependent on the length of time the tenant has been renting the property.

Tenancy Duration:                                                               Notice Period:

Less than 6 Months                                                                28 Days

Between 6 Months and 1 Year                                               90 Days

Between 1 and 3 Years                                                           120 Days

Between 3 and 7 Years                                                           180 Days

Between 7 and 8 Years                                                           196 Days

8 Years or More                                                                      224 Days

It is advisable that Landlords keep a printed record of these new notice periods and make themselves aware of these changes to avoid any issues going forward.

Another major change in terms of termination notices is the introduction of remedial notices. As of June 4th, 2019. This notice has been introduced to assist both landlord and tenant as an original notice served to fix the defect identified by the Tribunal can now be remedied by the issuing of a new remedial notice. Following a case lodged with the RTB, if deemed acceptable by the decision maker, either the tenant or landlord may have 28 days in which to serve a remedial notice. If the correct notice period was given, 28 days additionally may be served under the remedial notice, whilst if the incorrect period was given the new notice period will be 28 days in addition to the number of days the given notice period was short.

We hope that this series of posts is of assistance to you. As always, should you have any concerns of queries on any financial or business matters, please don’t hesitate to contact us here at EcovisDCA where we are always happy to assist.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Boom or Bust?

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We have spoken on many occasions over the years about the difficulties faced by prospective first-time home owners in the current market. From the inception of the more stringent rules for attaining mortgage approval, to the ever-increasing cost of living, renting and the increasing prices of homes available for purchase as demand increases and supply dwindles. With many effectively pushed out of the property market for the time being, it may come as a shock to learn that almost half of all properties sold in 2018 were paid for with cash or savings.

The latest Consumer Market Monitor from the Marketing Institute of Ireland and UCD Smurfit Business School confirms that despite a property market which remained sluggish throughout 2018, approximately 45% of all properties sold in 2018 were snapped up by cash buyers. Whilst remaining relatively sluggish, there was an increase of 8% in the amount of homes sold with 55,000 being sold and 25,000 being paid for with cash or savings. While this may seem like a rather large number of sales and a positive step for the industry, it is in fact still a massive difference to the number sold during the last boom, which reached 105,000 sales. The current numbers of cash sales in fact are more similar to those in the recession years during which mortgage approval numbers were at an all-time low.

Whilst cash buying may seem like harking back to boom times, and other areas of the economy continue to improve, the numbers actually suggest that while more mortgages are being approved than previous years, this is by no means a boom as levels remain consistently much lower than during that period.

Author of the report, Professor Mary Lambkin has said that;

“The property market’s sluggish growth does not reflect the large increase in the working population. […] While the number of homes for sale has increased, the level of property sales should be about double the current level, approaching the level that the market experienced during the early 2000s, when the workforce was about the same level as it is today.”

The cash buying phenomenon we currently find ourselves in has seen the price of modest homes skyrocket as cash buyers would appear to be more likely to purchase homes on the cheaper end of the spectrum. It is hoped that an increase in the construction of new homes will facilitate an increase in residential property sales in the coming year. As 35,000 homes are needed each year, it is hoped that construction will continue in order to begin to meet rising demand, with 23,000 new homes set to be built this year and next year.

As always, we here at EcovisDCA are available to assist should you have any queries on any business or financial matters. We look forward to hearing from you.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

The Housing Market – What’s Next?

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The housing crisis in Ireland is something about which we have spoken at length in the past. Between the mortgage rules and rising cost of rent excluding many from the market and the increasing cost of buying in general, this area has become quite the minefield in recent terms for anyone who wasn’t lucky enough to secure their house before prices began to climb. This week, it was announced that house prices in certain areas had dropped slightly for the first time in an age. The fact that this led to a giant exhale of relief is quite telling of the current market, as such a small event sparks a small level of hope for those currently saving to meet the lending rules. It seems from recent reports that prospective buyers have grown tired of being excluded from the narrative.

It was reported this week following a Sunday Independent opinion poll that almost three quarters of people currently saving for a mortgage believe the Central Banks mortgage lending rules to be incredibly unfair. This is a marked rise of 19% from last year’s findings and shows an atmosphere of dissatisfaction with the status quo in the housing market. It was also found that as few as 5% of those saving feel that the lending rules are fair. The study also found that more people are now saving for a mortgage than last year. Almost half of those surveyed stated that they didn’t feel the banks are doing enough to assist people in gaining a mortgage.

There was also a fairly strong belief revealed through this study that the housing market may be headed for another crash in the coming years with over half of those currently saving believing that this will be the future for the Irish housing market. This believe naturally creates discord among savers about whether or not now is a good time to buy, with 43% believing that now is the right time to buy, and 39% believing that now is not the right time to purchase a house. As you can see there is not much between the two camps given their utterly opposing views. Perhaps this discord is the reason why there has been a slight drop off in house sales this year, with the CRO (Central Statistics Office) reporting that there has been a drop of almost 5% in the first half of this year outside of the Dublin area.

While nothing is certain, particularly during these uncertain times as Brexit continues to loom large above us, there are certainly signs of a downturn in the housing market in the next couple of years as many people struggle to get a foothold on the property ladder.

Should you have any concerns, queries or require further information on these or any other business and financial matters please don’t hesitate to contact us we are always available to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Knock Knock Knocking on Overpriced Doors

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We have spoken many times in recent years about the difficulties faced by prospective home owners, whether they be first time buyers or otherwise. The mortgage rules currently in place in Ireland can no longer truly be called ‘new’, and are unlikely to be changed drastically but continue to place heavy restrictions on prospective buyers. Recent reports suggest that it may in fact be keeping many prospective buyers off the property ladder permanently, if not delaying the process by as much as a decade.

A large part of the issue seems to exist independently from the mortgage rules, while house prices have risen exponentially in recent years (and are forecast to continue to do so for at least three more years with the possibility of reaching a housing bubble due to lack of supply to meet demand), the cost of renting has followed suit, meaning that many prospective buyers find it increasingly difficult to save the required 10% deposit due to both rental costs and the overall cost of the house they wish to purchase placing increased pressure on the hopeful buyer. A recent report by Threshold has found that of those surveyed, less than a third are happy to be renting. 71% of those surveyed are currently renting due to not being able to afford a mortgage in the current market. Similarly, it was found that 96% of tenants have found it incredibly difficult to find appropriate and affordable rental accommodation due to the increasing costs which often see families spending between one third and one half of their take home pay on rent. Many tenants have been renting for in excess of five years due to the lack of other options available to them.

Chair of Threshold Dr. Aideen Hayden has been quoted as saying the following about the current rental crisis:

“A home is not just where you live, it is a place of sanctuary, offering protection from the stresses and strains of daily living. The current insecurity for tenants in the private rented sector means that they can’t look ahead and plan, they can’t put down roots.”

Whilst demand for housing strongly outweighs supply currently, it has recently been speculated by Savills that the trend in supply is turning upwards which may lead to a more balanced market by 2021, meaning that there is still space for some good news in the future for prospective buyers.

Should you require any assistance or guidance on any business or personal finance matters, please do not hesitate to contact us here at EcovisDCA where we are always happy to help.

Taxation of Vacant Lots

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The vacant site register has become a hot topic of conversation in recent months as many of Ireland’s development firms have begun to fight back against their inclusion on the list. This register was introduced in 2017 in an attempt to deter the hoarding of land in areas that could be utilised for housing development. As we have spoken about recently, housing supply is running low as prices continue to soar so naturally the hoarding of land has become somewhat of a bone of contention.

One issue that development companies are fighting here is the financial cost. Once added to the register, the local council can issue levies of up to 3% of the site’s market value to the owner. The owner will then have 28 days to appeal their inclusion on the list, and failing this, appeal to An Bord Pleanála. This can of course add up to quite significant levies being applied, leading to a number of development firms currently fighting against their local councils to appeal their inclusion on the register including housebuilding giant Glenveagh Properties and Ziggurat, a big name in the student housing business.

According to studies completed by Fora, 39 cases have been appealed to the Board since the beginning of 2017, with 11 having come to an official decision, and only 3 being granted their wish of being removed from the list while 8 were decided to be kept on. Two of the overturned cases related to land owned by the Office of Public Works wherein it was decided that residential properties would not be an agreeable outcome for these sites.

Whilst the effectiveness has been called into question with so few councils taking the land hoarding situation seriously and what was described by Goodbody economist Dermot O’Leary as a “lack of urgency” it seems that there is still room for improvement. Recently, The Minister for Finance has appointed international economic consultancy firm Indecon to complete an independent review of the issue and begin to inform a new government policy in this area. There is currently a period of public consultation until June 29th, so be sure to make your voice heard if you have something to add, or other concerns regarding the taxation of vacant property. This is also an opportunity to suggest alternative options, should you have any in mind.

With housing in such short supply and with these issues being at the forefront of the public mind, this is sure to be an ongoing battle and concern. Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Blowing Up the Housing Bubble

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The housing ladder has remained a hot topic of conversation since the economic downturn and subsequent changing of the rules for applying for a mortgage. The conversation doesn’t seem to be going anywhere as the concern of Ireland falling into the housing bubble trap increases as more and more prospective buyers find themselves unable to pay increasing asking prices.

This week it was reported that these increasing house prices do not look likely to slow down in the coming years. Goodbody Stockbrokers have stated in their latest economic report that the average price of a house is set to continue to rise by up to 10% this year followed by another 8% in 2018 meaning an additional 18% cost increase on houses which have already increased massively in price in the previous three years.

The report states that:

“Mortgage approvals, even excluding cash purchases, are in excess of the amount of new supply expected to come to the market, thus house price inflation is expected to remain strong over the forecast period. […]“While supply remains low, demand appears to be running ahead of expectations”.

Existing housing demand is said to be 30,000 per year, and it is reported that it will take another number of years in order for the number or houses built to match up to tahis demand. This lack of balance between supply and demand is what has encouraged this somewhat bleak forecast from Goodbody Stockbrokers, who have also stated that they expect there will be €13.5billion in new mortgage lending in the coming years.

An additional issue with supply and demand is that there are far more prospective homeowners being approved for mortgages than there are houses available, which continues to push prices higher. A recent infographic shows the increasing prices as they continue to grow. Mortgage approvals are being boosted by the Government’s popular help-to-buy scheme but many of those approved will find themselves without a home to buy.

Should you have any queries on home ownership, or any other financial or business matters, please don’t hesitate to contact us here at EcovisDCA, where we will as always be happy to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY