Budget 2025: Extending Help to Buy may drive up property prices, PBO warns

Extending the Help to Buy scheme may drive up property prices “as the measure primarily targets demand rather than supply”, the Parliamentary Budget Office (PBO) has warned.
In its review of Budget 2025, the independent fiscal oversight body noted the Government’s decision to extend the scheme, which provides tax rebates to first-time buyers, until 2029 comes despite a number of criticisms, including from the International Monetary Fund and the European Commission.
“The scheme has been described as a demand side intervention to address a supply side deficit, and a Department of Finance-commissioned review of the scheme found it to be poorly targeted and recommended it be phased out and restructured to more appropriately target recipients and reduce the deadweight,” it said.
Revenue data shows that 49,684 Help to Buy claims have been approved since its introduction in 2016 with an estimated cost of €1.07 billion.
In its review of the budget, the PBO said measures, which included changes to the income tax bands and a reduction in universal social change (USC), would increase take-home pay for workers.
However, it cautioned that “with the economy at full capacity these tax measures may add to inflationary pressures”.
From a distributional impact perspective, it said the tax and welfare measures were progressive with lower-income households gaining more proportionately than middle and upper-income households.
This was primarily on account of increases in core welfare rates and qualified child benefit.
In nominal terms, households gained an average of 1.9 per cent fromBudget 2025, it said, noting the lowest decile of households gained 3.3 per cent while the highest decile gained 1.2 per cent.
The PBO said that as temporary cost-of-living measures begin to unwind, “consideration may be given in carrying out a structural assessment of the adequacy levels of key social welfare payment rates”.