Help To Buy Scheme

The Government’s Help to Buy scheme opened on Tuesday 03/01/2017, and enables First Time Buyers to avail of financial support.

The Governments recent July 2020 Stimulus Plan announced an extension of the help-to-buy scheme to support new homeownership.

The Help-to-buy scheme will be enhanced for the remainder of 2020 (end of December 2020) so that the level of support available to first time buyers will be increased. The main change to the scheme now sees First Time buyers been able to avail of the lesser of €30,000 (up from €20,000) or 10 per cent (up from 5 per cent) of the purchase value of a new property (either bought or built). 

It is designed to help First-Time buyers meet tougher deposit requirements under Central Bank mortgage lending rules.

First-Time buyers either purchasing a new build or building their own home can apply for rebates via an application form available on the Revenue Commissioner website. The scheme permits applicants to claim back a rebate on income tax or Deposit Interest Retention Tax (Dirt) on bank savings paid over the previous four years previous to the year of purchase or building their first home. If the applicants have worked in Ireland for less than 4 years or has paid limited income tax the rebate amount

Scheme Restrictions

The available rebate is limited to 10% of total value up to a maximum of €30,000.00. The scheme is only available to First-Time buyers where the property is valued at not more than €500,000.00.

Applicants must be availing of financing of at least 70 per cent of the total value of the property. Under revised Central Bank rules, First-Time buyers can borrow up to 90 per cent of the value of the property, with the implementation of this scheme the majority of First-Time buyers will effectively need to raise a deposit of 5% of the total value of the property.

Recent First-Time Buyers

There is good news If you are a first-time buyer who either buys or self-builds a new residential property between 19 July 2016 and 31 December 2021, you may be entitled to claim a refund of income tax and DIRT paid over the previous 4 tax years.

In a situation where you signed a contract to buy a property (or drew down the first tranche of the mortgage for a self-build) before 19 July 2016, you will not qualify for this incentive.

If you signed a contract to buy a property (or drew down the first tranche of the mortgage for a self-build) between 19 July 2016 and 31 December 2016, you may qualify for the Help to Buy incentive on a property costing up to €600,000.

With effect from 1 January 2017, the Help to Buy scheme only applies to properties costing €500,000 or less.

Applicants must be owner-occupiers, buy-to-let or investment properties will not be subject to rebate. Applicants who avail of the scheme must remain living in the property for five years or could face a rebate clawback.

How To Apply?

The application process for the Help-To-Buy scheme is straight forward and available online. The First-Time buyer will is required to upload a copy of the signed contract to purchase and will also need to include property details such as purchase price and the completion date for the purchase. They will also need to provide details of the mortgage lender and of the mortgage, including the loan-to-value ratio. First-Time Buyers will evidence to prove that they have paid either the full deposit, where the home was bought in 2016, or the balance of the deposit due after the rebate to qualify.

Revenue require details of all purchasers involved the property purchase (both persons where a couple are purchasing the property) so that the tax rebate may be apportioned to each person. The application form requires details of the contractor/developer selling the property where a new home is being purchased or in the case of a self-build property details of the solicitor acting on their client behalf who must provide proof that the first tranche of the mortgage has been drawn down to pay for the commencement of the self-build.

On application completion, Revenue will confirm the details provided. To confirm these details, Revenue will either contact the developer/contractor selling the house directly or contact the purchaser’s solicitor in the case of self-builds. Revenue will also check planning permission compliance and that the contractor/developer is tax compliant at this stage.

Applicants will be required to be registered on the Revenue Commissioners’ on-line portal, MyAccount, for managing your personal account with their services. The MyAccount portal allows customers of the Revenue Commissioners manage all their personal tax affairs, including income tax returns, local property tax and applications for the Home Renovation Incentive on-line at a single point of access. To register for the MyAccount portal users require the following personal public service (PPS) numbers to do so along with their date of birth, phone number, email and home addresses. Once applicants are registered with the MyAccount portal, they will be required to complete a form 12 tax return for each of the years on which they are seeking a tax rebate.

 Talk to us about the Help to Buy Scheme