Help to buy scheme extended to 2021, modest carbon tax increase

ROI’s Budget 2020 has extended the Help to Buy scheme to the 31st December 2021 under its current format and increased the carbon tax by €6 to bring it to €26 per tonne.

Petrol and diesel price increases will happen overnight (8th October 2019) but increases on home heating will be applied in May 2020.

The Budget 2020 refers to an ESRI report entitled The economic and distributional impacts of an increased carbon tax with different revenue recycling schemes

that finds that “a carbon tax could have some adverse impacts on GDP, inequality and household income.

Finance Minister Paschal Donohoe told the Dáil: “I know this will not be easy for everyone. Therefore, instead of a larger increase in any one year, I am committing to a €6 increase as a first step towards the 2030 target.”

Electric car charging points are to be added and grants to buy e-cars will stay in place.

Help to Buy

Director of the Irish Homebuilders Association, James Benson commented that the Help to Buy scheme doesn’t address affordability issues.

“Our analysis shows that average couple, even with the Help to Buy, will struggle to save the required deposit.  Couples earning under €93,000 are effectively frozen out of the Dublin housing market; even with the HTB they will have to save €20,000 approximately as a deposit.”

He added: “Many housebuilders have reported that up to 80 per cent of homes sold to first time buyers they are currently enabled by the Help to Buy Scheme.”

Energy grant update

According to the Department of Communications, Climate Action and Environment, an allocation of €146m (€29m increase on 2019) will be used to upgrade 24,000 homes and businesses. This is a nearly three fold increase on 2016 funding.

A new “Retrofitting model” will deliver upgrades to large groups of houses at the same time to drive down cost, develop easy pay back mechanisms making the works easier and more affordable. This work will commence in 2020 with a programme targetting social houses in the Midlands.

UPDATE 12th October 2021: Budget 2022 has extended the Help to Buy scheme to the 31st of December 2022 and increased the carbon tax from €33.50 to €41 per tonne of carbon dioxide emitted. This applies from budget night for auto fuels and 1 May 2022 for all other fuels.