Coveney defends ‘mansion’ grant in Budget

HOUSING Minister Simon Coveney has robustly defended the introduction of a first-time buyers’ grant after criticism that the upper threshold amounts to a ‘mansion grant’.

In today’s Sunday Independent, Mr Coveney writes: “First-time buyers will get 5pc of the value of a new property up to €400,000. In order to prevent a cliff effect over that figure, it was decided to limit the benefit to the value of €400,000, but allow property up to the value of €600,000 to qualify for the maximum rebate of €20,000.

“This was to ensure that a buyer of a property for €405,000 would not get nothing while a buyer of a property for €400,000 would get the full rebate. So it’s capped at €20,000 but there’s some flexibility in the qualifying upper threshold to accommodate the high-priced Dublin market.”

In order to qualify for the rebate, a buyer needs also to borrow 80pc of the house value, so the scheme would not be supporting buyers who had significant cash available.

Also today, economist Colm McCarthy writes: “To qualify for a mortgage on a €600,000 home, the borrower would need, under the Central Bank rules, an income of €171,000 per annum. Even for a joint income, this is at the upper limit of the Irish income distribution. For a single income, this is a grant to the very highest earners in the country.”