Finance Minister Michael Noonan has announced a tax refund for first time buyers who save to buy their first home.
Speaking during his Budget speech in the Dail, Mr Noonan said he is introducing a refund for DIRT tax on any savings used by young couples who are looking to buy their first home.
The refund will apply from tonight and will run until the end of 2017.
It will apply to savings “up to a maximum of 20pc of the purchase price of the home,” Mr Noonan said.
“As a result, first time buyers will be able to save for their first home and retain 100pc of the interest that they earn on their savings. I would expect that the banks will introduce specific savings products to support this new initiative,” he said.
Mr Noonan announced a number of measures in his speech which are aimed at increasing activity in the construction sector to address what he called the insufficient supply of homes.
Mr Noonan said he is extending the Home Renovation Incentive to rental properties “whose owners are liable to income tax.”
He said that he wanted to see the benefits of the incentive reflected in lower rent levels.
He said this incentive will remain in place until the end of 2015.
The Home Renovation Incentive has been very successful to date with just under 9,300 homes on the HRI online system representing nearly €190 million worth of works involving some 3,000 contractors,” Mr Noonan said.
He said the Incentive is generating employment in the tax compliant construction sector and increasing sales in building supplies, hardware and related businesses.
He said the incentive will allow work to be carried out in a cost effective manner.
He also said that an extension to the Living City Initiative, announced in Budget 2013 will see its full roll out in 2015.
Mr Noonan also removed the capital gains tax relief I introduced to incentivise the purchase of property between the 7th of December 2011 and the end of 2014.
He said it has achieved its objective of increasing property transactions and is no longer needed.
He said he is also removing, with effect from the 1st of January 2015, the 80pc windfall tax applying to chargeable gains on the disposal or development of land which are attributable to planning decisions made since October 2009.
Mr Noonan also said he will examine what taxation measures “to penalise land owners who do not develop land that is already zoned and serviced.”
He said there is a view that owners of zoned and serviced land are waiting for higher prices and that is why they are not taking steps to develop their land or sell it to others who will.
He is to launch a public consultation in the coming months on this issue and, if it turns out to be a valid point of view, then he will move to penalise those sitting on the sites.