Budget 2024 (Focus on Housing)

The budget 2024 package announced on the 1oth of October, consisted of €6.4 billion. Additional public spending was €5.2 billion and taxation measures, €1.1 billion. Will there be changes to government grants and more aid for first time buyers? In this blog post, we summarise the key new measures related to housing.

Help to Buy Scheme

The Help to Buy Scheme that allows first-time buyers to claim back up to €30,000 in tax has been extended to 2025. It was also announced that applicants for local authority affordable purchases can also avail of this government scheme.

Renters Tax Relief

The tax relief from Budget 2024 was increased to €750 per year. The tax relief was also extended to parents paying for students in ‘rent a room’ or ‘digs’, backdated to 2022.

One Year Mortgage Interest Relief

Mortgage interest relief was available from January 2013 to 2017.  It was announced in the budget that this will now resume. There will be mortgage relief at 20% tax rate on difference between interest paid in 2023 compared with 2022, capped at €1,250. There will also be relief for primary dwelling mortgages of between €80,000 and €500,000 as of the 31st of December 2022.

The average interest rate for Irish mortgage holders rose to 4.04 per cent at the end of June. We have experienced ECB rate increases and as a result, lenders increasing their mortgage rates such as PTSB and Bank of Ireland. So, if you are considering getting a mortgage, we would advise to get your AIP quick to secure a good rate while you can! Irish rental prices are higher than ever, so now is a good time to join the property ladder.

Income-Based Tax Breaks

The Standard Rate Band, which is the level at which earners begin to pay the higher rate of income tax, has risen from €2,000 to €42,000. This might help to increase mortgage affordability for a lot of first and second time buyers.

Reduction on Landlord Tax

Landlords will benefit from a tax break worth between €600 and €1,000. This will increase every year they stay in the market till 2027.

In a recent interview,  Mr O Brien said he was focusing on reducing tax on rental income earned by landlords. He said that he was committed to “meaningful and effective measures to retain and to attract good landlords”. 84% of rental homes are currently owned by landlords who have one or two properties. Thus, a reduction of landlord tax could see fewer landlords leaving the rental market. This measure may help renters but not prospective first time buyers looking for available properties.

Vacant Property Tax

Also, the vacant property tax will be increased from three to five times the rate of Local Property Tax.

An Bord Pleanála has already dismissed an overwhelming majority of appeals for exemption from the tax from major Irish developers. Perhaps this increase in tax may help to bring more available properties to the market in 2024..

Budget 2024 Overview

Unfortunately, we do not have a crystal ball to see how the housing market will be in the next few years. However, what remains evident is that a home ownership is still cheaper than renting.

So, if you are considering getting on the property ladder we would advise that you get your AIP as soon as possible.

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