Business News

First-time buyer refund scheme ‘almost laughable’

A much-heralded Government initiative aimed at helping first-time buyers onto the property ladder has been described as “almost laughable” by a consumer expert, given current interest rates.

The deposit interest retention tax (Dirt) relief applying to deposits up to the value of 20% of the purchase price of a new house announced as part of last year’s budget is not worth enough to people to entice them into claiming their refund, according to Simon Moynihan of

“With interest rates as low as they are right now, in general, the whole notion of the Dirt refund was almost laughable,” Mr Moynihan said. It was something that was hardly likely to cause any major ripples or really have a boost to anyone’s finances.

“It seems to me to be something that sounded good in the budget but in reality people have seen it for what it is and it’s not worth the hassle that you’ve to go through to figure out how you apply for a refund; to do all the paperwork that’s necessary and it obviously would require some liaising with the banks.”
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The relief applies to savings used by first-time buyers towards the deposit on a house bought between October 2014 and December 2017. With interest rates near record lows, however, savings of €10,000 earning interest at 1% would equate to €100 extra.

Usually, once Dirt was applied, €43 of the interest would be returned to the Government, but the initiative means first-time buyers are exempt. Such a small return is not worth people’s time though, says Mr Moynihan — something borne out by the figures.

Just 43 first-time buyers have been issued a refund under the scheme to date, compared to the 9,500 homebuyers Finance Minister Michael Noonan predicted would benefit from it in its first year.

Part of the delay may be rooted in the delay establishing the application system which only came into operation in March. Since its inception just 10 refunds have been issued per month with an average payment of €294.

Fianna Fáil finance spokesman Michael McGrath described the relief as a “drop in the ocean”.

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