State spending on a range of housing initiatives has risen significantly in recent years as the pressure is on to increase housing supply
However, a few key points are clear. The first is that the total is very significant. Our calculation of gross spending and tax breaks this year adds up to €8.3 billion. In the context of an annual State budget of €100 billion or so, this is a big chunk.
State resources for housing fall into three main areas. The first is capital or investment spending – building or buying houses or helping to fund others to do so. The second is current or day-to-day spending, the huge array of State supports which help people to access housing. And the third is a variety of tax breaks and allowances designed both to help buyers and offer incentives to those building homes.
A total of €1.5 billion is expected to be advanced by the HFA. It raises borrowings on the market but, as these are guaranteed by the State and it advances loans on a favourable basis, it needs to be counted as State-supported spending. Construction of these homes is back up and running, though the delivery of new units is not yet at the pace required to meet the population’s needs. As a result, the Government has had to find alternative ways to provide homes to those with social housing needs. The two main ways through which this is done are the Housing Assistance Payment and the Rental Accommodation Scheme .
The Economic and Social Research Institute in 2022, for example, found the rent paid by a lone parent with two children earning €25,000 per year ranges from between €226 and €450 per month, depending on tenant location. According to a 2021 report from the Department of Housing, there had been a 26 per cent annual average increase in spending on homelessness since 2014 – when the department first began to publish figures on the number of people in emergency accommodation. However, the report highlighted the €270.9 million in 2020 was higher than average due to carry-over of spending from the previous year.
Since the financial crash, governments have been cautious about tax breaks. But they are still a key factor in the market. On the buyer side, the key incentive is the Help-to-Buy scheme, which is a tax refund of income tax and deposit interest retention tax paid by first-time buyers. Its estimated cost for this year is a hefty €185 million. First-time buyers can also get support under the First Home Scheme, counted as part of the Department of Housing budget.
A total of €1.2 billion was claimed by private landlords in 2022 . The cost of this depends on the rate at which the landlords pay tax – taking a middle figure of 30 per cent leaves an annual cost of these reliefs of around €400 million, which we have also included in our totals.
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