ClareDaly TD

QUESTION NOS: 38,39,63,67

* To ask the Minister for Finance further to parliamentary question number 201 of 4 April 2017, if the independent economic impact assessment of the help to buy incentive referred to in the response to that question has been commissioned; and the status of its progress and findings to date.

– Clare Daly T.D.

For ORAL answer on Wednesday, 5 July, 2017.
REPLY.
As the Deputies may be aware, during the Committee Stage debate on Finance Bill 2016, my predecessor agreed to commission an independent impact assessment on the effects of the Help to Buy incentive for completion prior to Budget 2018. Following a competitive tender process, Indecon Economic Consultants were appointed in April to undertake this assessment.

This purpose of the project, in general, is to assess whether the policy objectives on the supply of new homes are being met, what impact (if any) the scheme is having on new and second-hand house prices, and what impact the scheme is having on the residential property market generally.

Any moves to amend or suspend the incentive prior to the completion of this report, which is scheduled for the end of August, would effectively pre-judge the outcome of the analysis. Once received from Indecon, the contents and findings of the report will be considered and I will decide on any appropriate action(s) to take in relation to its findings, in the context of my deliberations as part of the annual budgetary process.

The Government remains of the view that the Help to Buy incentive has the potential to increase the supply of new-build homes, which is a crucial factor in addressing the problems facing our housing market generally.

In my view, it is the lack of supply that is primarily responsible for driving house prices higher and I would point out that increases in house prices prevailed long before the introduction of the Help to Buy incentive. I would also point out that the scheme is targeted towards new build homes only, and to first-time buyers only, and it would be simplistic to designate this incentive as being the sole or the major contributor to house price increases.

Finally, I would like to reassure members of the public who may be in the process of applying for the Help to Buy incentive, or those who currently have applications pending, that speculation concerning its abolition will not impact negatively on their applications. I would propose to signal well in advance, any proposed changes to the incentive following my consideration of the Indecon report.

QUESTION NO: 54

DÁIL QUESTION addressed to the Minister for Finance (Deputy Paschal Donohoe)
by Deputy Clare Daly
for ORAL ANSWER on 05/07/2017
To ask the Minister for Finance further to parliamentary question numbers 218 to 222 of 20 June 2017, if compliance is done on an ongoing basis by both the Revenue Commissioners and the lending institutions; the date of the last compliance check by the Revenue Commissioners on lenders to ensure that the correct operation of the mortgage interest relief scheme took place; the outcome of that check; and the frequency with which these compliance checks are done.

REPLY.
Revenue carries out continuous compliance checks on lenders to ensure the correct operation of the mortgage interest relief scheme.

As part of the process, each main lender is required to submit a monthly electronic download to Revenue setting out the amount of qualifying interest paid by each borrower and the amount of mortgage interest relief allowed in respect of each qualifying loan in the previous month. The smaller lenders and local authorities are required to submit annual files setting out similar information.

Each month Revenue cross-checks all of the information provided by the lenders against its own databases and any discrepancies are very quickly queried with the particular lender. The most recent compliance checks to be completed related to May 2017 during which 283,158 TRS accounts were reviewed. Following the review 2,687 queries were raised with the various lenders of which only two still remain to be resolved.

In addition to the monthly cross-checking reviews, any queries or complaints received by Revenue from individual borrowers are fully investigated and followed up with the lender concerned.