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The Help to Buy (HTB) Incentive

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.

What does the property market look like for 2020?

Good Cop Bad Cop

We have spoken many times in the past couple of years about the difficulties facing prospective home buyers in the current market. Between the rising cost of living and the increasing rental costs limiting the ease of saving the required deposit and the ever-growing cost of properties themselves it has become incredibly difficult to gain a foothold on the property ladder. There is mixed news on this front to herald us into a new decade which leaves a level of uncertainty about what we can expect going forward.

On a positive note it has been reported this week that the construction sector has seen a much-needed boost and has begun growing again for the first time since August 2019. The Ulster Bank Purchasing Managers Index suggests that this growth forecasts a strengthening of the housing construction sector which may hopefully see more supply rise to meet demand. This also extends towards the commercial construction sector which has also reported growth and will be good news for companies looking to Ireland as a new base ahead of Brexit.

The reason for this newfound growth is cited as being a reduced level of Brexit uncertainty. The uncertainty around Brexit has plagued Irish business life for a while now and the easing of this panic is a welcome change across all sectors and reflects a new expectation of continued success in 2020.

This lessening of Brexit panic also has some negative consequences as it has been reported that there is an expectation that despite a new revival of the construction sector, we may see housing prices rise once again in the year ahead. Property price increases had begun to slow significantly towards the end of last year due in large part to Brexit concerns so this will be unwelcome news for any hopefuls currently saving hard. Davy Stockbrokers reports that subsiding Brexit fears may see a higher level of spending on high-end properties. They have stated that average house prices rise by 2% this year with the possibility of further rises “if the top end of the market benefits from reduced Brexit uncertainty.” Davy Stockbrokers also support the suggestion that the construction sector will continue to grow in the year ahead. It is suggested that the increase in time before Brexit becomes reality may be the reason for this lessening of anxiety.

A little bit of good news vs bad news to balance out the beginning of the new decade!

Should you require any guidance or advice on any business or financial matters, please don’t hesitate to contact us here at EcovisDCA, where we are looking forward to helping your business flourish in the roaring 20s.

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY

Landlords – New Notice Periods to be Aware of

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 PARTNERSDECLAN DOLAN & EAMONN GARVEY

Boom or Bust?

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 PARTNERSDECLAN DOLAN & EAMONN GARVEY

Taxation of Vacant Lots

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 PARTNERSDECLAN DOLAN & EAMONN GARVEY

Kick Bills before Buckets

With Irish people now beginning to get a foothold on the property ladder later in life, we are also beginning to start families slightly later and as such, thoughts often turn to what provisions can be made for your family in the unfortunate event of your death. Whether sudden or prolonged the death of a loved one has devastating emotional consequences so it is advisable to think ahead and do all that you can to avoid there also being devastating financial consequences. It’s a fairly morbid thought to begin the year with but we are big believers in thinking ahead and there are dangers to be found in ignoring the inevitable.

 

It is advisable to think ahead and to have your affairs in order in so far as possible at all times and at the very least to know what would happen to your existing finances or your current payments in the event of your passing. We might all have hated those conversations our parents would begin about the event of their death, but they are wise to open these discourses to avoid burying our heads in the sand. Having your affairs in order could prevent causing additional pain to your loved ones at an already emotionally painful time.

 

Something which is often overlooked are bank accounts. Whilst many of your debts will pass away with you, bank accounts are not among these. Your bank account will continue to issue payments etc. as usual until informed of the death, so it is advisable to ensure that someone is aware of all of your accounts as they may then be liable to take over a debt they were unaware of, or the account could be left running into difficulty. By contrast, the advantage of a joint account means that all funds can pass directly to the named survivor on the account.

 

Credit Union accounts are another issue which surviving loved ones are often unaware of as your loved ones might be able to avail of a pay out from your credit union savings following your death due to a little known life insurance scheme which accompanies your credit union account as well as being able to avail of any savings you have made. Credit Union loans differ from most as they will typically be cleared upon the death of the account holder.

 

The most crucial manner in which people fail to keep their loved ones up to date on their financial matters is their debts and loans. Many debts or unpaid loans will simply pass to your estate and interest will continue to accumulate on these until paid in full, causing a further headache for your family in what is already a difficult time, debts can even be recovered from existing accounts leaving loved ones without access to these previously available funds, whilst your estate can be liable for any remaining balance.

Mortgages can be problematic, some banks allow a moratorium following a borrower’s death although interest may continue to accumulate so it is wise to check your options in advance so all parties are aware of the situation, and to ensure your mortgage protection is full and up to date.

Having a current up-to-date list of your accounts and investments and ensuring that someone has the information or access to this information to avoid further heartache at a difficult time. Though these issues may feel morbid to bring up, they are vital to ensure that your loved ones can live on as comfortably as possible.

Should you require any assistance or guidance on these or any other financial or business matters please do not hesitate to get in touch or arrange a meeting with us.

 

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DCA PARTNERSDECLAN DOLAN & EAMONN GARVEY