If our Government wants to make housing more affordable, there is plenty it could do

Although still weeks away, pressure is already being applied for more or extended measures to be introduced in Budget 2027 to help households buy homes and the property industry build and sell them more profitably. Stamp duty is, as always, in the crosshairs. The Institute of Professional Auctioneers and Valuers wants the purchase of second-hand homes by first-time buyers exempt from this tax. In April, Taoiseach Micheál Martin said Government would look at measures to “alleviate the pressures on first-time buyers, particularly in regard to the application of stamp duty”. In May, Minister for Finance Simon Harris said he was not considering removing stamp duty for first-time buyers, adding that “the last thing we need to do … is inject any uncertainty into the housing market”. It appears the only certainty is uncertainty.With a shedsit load of chutzpah and no sense of irony, lobbyists’ Irish Institutional Property’s Budget 2027 submission had eight “asks”, one of which was – quite understandably – for “tax certainty”, while the next five argued for changes to the property tax regime.READ MORERemoving stamp duty for first-time buyers of new or second-hand homes will simply leave potential purchasers with more money in their pockets to spend, which will lead to rising house prices and ultimately do nothing to improve housing affordability.We have been here before. In 2005, even with fast-rising house prices, first-time buyers were granted an increased stamp duty exemption on second-hand houses from €190,500 to €317,500. In 2007, to resuscitate a flagging property market, stamp duty payments for first-time buyers of new and second-hand houses and apartments were abolished by then minister for finance Brian Cowen. Both initiatives were rescinded by the end of 2010 as the State needed the stamp duty income.In the 10 years since 2016, the number of houses built annually has increased by 373 per cent to 36,284 new dwelling completions in 2025. At the same time, however, the number of household buyers in the market has increased by just 27 per cent; “non-household buyers” have increased by 34 per cent, reflecting the growing presence in the market of other players. Other players include the State itself in the form of councils and approved housing bodies buying new dwellings, as well as domestic and international investors. Some 7,349 new houses and apartments were bought by the State last year, along with 676 second-hand houses. At the same time, councils built just 1,600 new social houses. The four Dublin councils bought 3,448 of the 7,298 (47 per cent) new dwellings completed in their areas in 2025. In 2016 the proportion of all new houses for sale on the open market was about half those built, and last year it was just under a third. Output is up, but availability is down.The Help to Buy Scheme, which provides eligible first-time buyers with a tax refund of up to €30,000 on homes purchased for up to €500,000, is also a target. Fianna Fáil’s Séamus McGrath has called for the limit to be increased, as have the estate agents, Savills suggested this be raised by 24 per cent to €621,000. Fine Gael’s Micheál Carrigy also wants it extended to second-hand houses.A money pit, this unnecessary and socially regressive scheme benefits higher earners, and will cost more than €250 million this year (€1.5 billion to date), with none of this expenditure helping to reduce the price of a house. Since the introduction of Help to Buy in July 2016, the average price of a new house is up 70 per cent and house prices overall have nearly doubled.The Central Bank of Ireland has reported that houses bought with Help to Buy are €62,800 more expensive than those purchased by other first-time buyers, mostly because they reckon Help to Buy recipients are buying larger houses. In 2025, a total of 9,575 applications for Help to Buy were approved, of which nearly one in six were for self-build houses, which are usually one-off dwellings. The average size of a new one-off house is 195sq m (2,100sq ft), nearly twice the average size of a new home. If a household can afford to build a home this large, they do not need up to €30,000 of taxpayers’ money to help finance it.The Housing Act of 1970 and the Housing Regulations of 1980 both gave new homes grants but were size limited to 100sq m and 125sq m respectively. “It has been the policy of successive governments that new house grants should be payable only in respect of reasonably sized houses,” said Fine Gael’s John Boland sensibly of the regulations at the time.The 2022 Mazars review of Help to Buy recommended that self-build houses be excluded from the scheme and that the scheme itself be withdrawn, as it does not “represent good value for money”. The scheme has subsequently grown by 40 per cent.Since 2013, 46 tax measures have been introduced in housing, alongside other rebates, funding and grants for councils, developers and builders, costing about €12 billion (or the equivalent of about 34,000 new social and affordable houses) per annum. There have also been 46 legislative and policy changes (some of which overlap) over the same period. This is symptomatic of a lack of strategic direction, resulting in hyper-responsiveness to lobbyists’ asks. Neither has any Government department identified what benefit accrues to the State for such taxpayer-funded largesse. We have no clue what bang we are getting for every buck spent across each scheme.This lack of rudimentary analysis results in a private development sector that has its business risk underwritten by the public while reaping significant profits for itself. Top housebuilders Cairn Homes made an operating profit of €168.6 million in 2025, and Glenveagh some €144.1 million.If the Government wants to make housing more affordable, then there is plenty it can do: invest wisely in building more social housing directly (just 16 per cent of all social housing was built by councils last year); ignore the lobbyists preaching certainty but peddling change; scrap Help to Buy and leave stamp duty alone; and let the market fend for itself (a brave move, admittedly, but a natural one surely for our free-market advocate Ministers and policymakers).Chasing the market with more incentives, exemptions and subsidies is not an effective – or financially sustainable – response to housing affordability.Lorcan Sirr is senior lecturer in housing at the Technological University Dublin