The plan announced in the Budget to refund tax for those saving for a deposit for a home has been dismissed as of little use – Charlie Weston
And bankers admitted that low interest rates for savers meant the benefits would be in the hundreds of euro, and not thousands.
First-time buyers will get a refund on the deposit interest retention tax (DIRT) on savings being used to build up a deposit to buy a home.
They will have to pay it first, and then seek a refund. The refund will apply from now and will run until the end of 2017.
It would apply to savings “up to a maximum of 20pc of the purchase price of the home”, Finance Minister Michael Noonan said. But calculations have shown that it will contribute little to building up a deposit.
New rules due to come in next year will mean 20pc will become standard, instead of 10pc at present.
Simon Moynihan of price comparison site Bonkers.ie said the concession would mean that a couple who managed to save €6,000 in a year would get a refund of just €49. This is if they can get interest of 2pc and earn €120 before tax.
“The new Central Bank lending restrictions mean that a 20pc deposit is set to become standard from next year. Getting €49 back in DIRT is not going to go a long way when new buyers have to save double the previous amount to get a deposit together.”
Mortgage expert Karl Deeter said the refund would not make a significant difference given the requirement for a 20pc deposit and low interest rates.
Tanaiste Joan Burton conceded yesterday on RTE’s ‘Morning Ireland’ that the Central Bank deposit rules seemed “quite high”. She said they were only proposals.