Originally appeared in
Simon says we need a new product for first-time buyers
Published in The Sunday Times on April 5 2026.
I was thinking recently about the new investment product which has been mooted is going to emerge from current discussions on how to put some of the €170bn in low or no interest bank accounts to use.
It’s in the embryonic stages but it seems that the plan is to establish an entirely new product which will be offered by a limited number of providers, which won’t be subject to CGT or exit tax, but the capital balance of which will be taxed at a very low rate each year. Don’t get too excited, indications are that this is going be limited to a modest amount of savings, perhaps in the region of €25,000, so it is not going to change the investing landscape dramatically for larger investors.
Firstly, I don’t understand why an entirely new product is required. The industry has been asking for two things for a long time now – a reduction in the rate of tax on investments to something closer to the Capital Gains Tax rate of 33% and abolition of the deemed disposal rule which requires an investor to pay tax on unrealised or notional gains every 8 years. In my view, if you really want to tackle the issue of the idle €170bn, any travel along either of these roads would be preferable to an entirely new product which by its very nature, will have limited use.
That aside, if the government are set on going this road couldn’t they just amend the taxation of existing investments. No new product is required. If an investment is less than the maximum amount permitted, it should be simply designated as qualifying for the different tax treatment.
If we are going to reinvent the wheel why don’t we try to improve the wheel. We are told that the policy objective is to encourage Irish households to invest and to counter the destruction of wealth caused by the large amount of funds sitting on deposit which are being devalued by inflation. Now it’s always good to kill two birds with the one stone so is there anything else we could think of that maybe we could do with improving, like the plight of first time buyers?
Seeing as we seem set on developing an entirely new product, some would say for a bit of fanfare and positive spin, why don’t we try to do something positive which would actually require us to devise a new product.
Why don’t we develop a product similar to the UK Lifetime ISA, also known as the LISA? This product is for adults aged 18-39. An individual can contribute up to £4,000 per year. The government adds a 25% bonus and it can only be used towards a deposit for a first home or accessed at age 60. Withdrawals for other purposes trigger a penalty.
We don’t have to mimic the LISA precisely. We could set our own rules to achieve the desired policy objective. Instead of the government contribution we could eliminate the tax on gains. I would suggest that an annual limit in line with discussions currently being had of c€25,000 per person may be appropriate as saving this amount may demonstrate repayment capacity for a future mortgage and the proceeds could be used to fund the deposit for a first time buyer.
I haven’t patented this, it’s not about anyone taking credit, it’s for the greater good. No fanfare or spin here. I’m not expecting to be called the EOGHAN.
It would go some way to achieving the same policy objective as is being worked on at present and it would also give first time buyers just that little bit of an edge over others, an edge they badly need. Non first time buyers will benefit too, but over a longer timeframe as it will form part of their retirement provision, thus reducing any possible inflationary effect.
But the first time buyer issue is a supply side issue and increasing demand will not help I hear you say. I know that, I’m not seeking to increase demand but rather to skew the benefit of this just that little bit towards those who need it most.
And the name for my new product, the Savings and Investment for Mortgage Ownership Now, or the SIMON for short.
Eoghan Gavigan is a certified financial planner and the owner of Highfield Financial Planning hfp.ie
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