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Comment by Moodles | Hacker News Reader

Another thing which non-UK readers might not be aware of is that the UK government introduced a "Help to Buy" and "Lifetime" ISA, which is essentially an account with some bank where, any money you put in (up to a certain limit), the government will give you an extra 25% free if yiou use it to buy your first home. While this might seem to help with home ownership, I think studies have shown that it only really benefits people who were already saving hard, and thus it only really contributes to house price inflation. I'd be interested to know if other countries have similar schemes.

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So basically I am paying taxes so that someone who is fool enough to pay there overpriced flats, can buy a flat, which will go bust because this pricing scheme is not sustainable.

Well done UK Gov/HMRC, it's good to know that HNS is bleeding but you feed the sharks!!!

If we are talking about Government schemes that actually raise housing prices then the Help To Buy Equity Loan needs a mention too. This has only served to line the pockets of developers - I still cannot believe they extended the scheme. https://www.helptobuy.gov.uk/equity-loan/equity-loans/

help to buy also means the government has an increased financial interest in increasing property prices because they have a larger portfolio of properties that they have a direct equity share in.

Australia has the "First Home Buyer's Grant". It just serves to inflate the general price of houses though.

Yes, it's a pity that went south.

For readers not familiar with this mechanism in Australia, sellers just raised prices by the value of the grants.

And for people not familiar with economics, the pool of potential buyers all ended up with the same bonus and used that bonus to bid up the fixed pool of available housing stock.

Interesting. How long ago did that get introduced and is there any studies on impact on prices?

In Italy there is a different taxation on the buying contract sum.

First home it is 2% if bought from a private and 4% if bought from a firm, in this latter case it is VAT (and some types are excluded being "luxury").

Non-first home is 9% if from a private or 10% VAT if from a firm (up to 22% for some types that are considered "luxury").

Then usually banks provide "special" loans at a slightly lower rate to "first home" buyers, but that has nothing to do with the government.

I wonder why these first-home grants (many countries have them, Australia, Canada and New Zealand for example) don't say - use this but only for a house within 5% of government valuation. That way, the price can't be inflated. Sure - for now, many may not be able to bid on a property but once prices start to fall this should make sense.

This is because the actual reason (for the First Home Buyer's Grant in Australia at least) is to stimulate the building industry. It is not to make housing cheaper.

Ditto the government's reduction in stamp duty for first time buyers. On the face of it the buyer is saving £3k (for example), but now that all of the first-time buyers have an extra £3k in their pockets, guess what happens to house prices?

We got the same thing in France with the various welfare programs to access housing (mostly for renting, but there's also some when buying): the APL, for people in the lower income brackets but not living in social housing. But it just raised rents and house prices, which is detrimental to the people in the brackets above the limit.

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