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First Time Buyers’ scheme goes from bad to worse - Pearse Doherty TD

20 October, 2016 - by Pearse Doherty TD

Sinn Féin Finance Spokesperson Pearse Doherty TD has stated the government’s proposed First Time Buyers’ scheme is going from bad to worse with news that the qualifying Loan to Value limit will now be reduced to 70%.

Deputy Doherty said the government was now effectively saying those who can comfortably meet the Central Bank’s deposit rules and afford a home are now going to be given €20,000 back by the government.

Deputy Doherty said:

“Minister Coveney’s statement today, that the qualifying LTV value will drop to 70%, highlights how ill-thought out this idea really is. We are now moving to a position where those who can afford a mortgage based on a 70% loan and who comfortably meet the Central Bank deposits rules are still being offered €20,000 in tax back. The effects of this policy on house prices should be obvious to all.

“It is interesting that Minister Coveney acknowledged today that Fianna Fail ‘want the measure to work.’ That should come as no surprise given that this idea is a Fianna Fail idea in spirit. They cannot be trusted when it comes to schemes to help developers or to create a functioning property market.

“The scheme announced by the government in last week’s budget is fundamentally flawed as is Fianna Fáil’s version of this scheme. No tinkering with thresholds or other cosmetic changes can transform a bad idea into good idea. This is a supply side problem and the two parties in power are proposing different versions of a demand side solution, with no regard to the consequences.

“I also wish to welcome the decision by the government, after much prodding by myself, to get serious about dealing with the issue of vulture companies using Section 110 status to avoid paying tax and to crack down on the abuse of funds involved in property deals through a withholding tax, as I argued for.

“However, I fear that another loophole is being created in this Finance Bill through a Capital Gains Tax and withholding tax exemption for these very same funds that hold property for five years.

“Sinn Féin will study the Finance Bill in great detail and make constructive proposals through the legislative process.”

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