The Help to Buy Incentive, which came into effect on 3rd January 2017, was designed to help first time buyers acquire the deposit necessary to buy a newly built home. Another goal of the the scheme is to incentivise developers to build more new homes.
Under the scheme, first time buyers can claim a tax rebate of up to €20,000 for the purchase of new-build and self-build houses and apartments.
Interested and want to know if you qualify to apply? Read on…
The maximum tax refund is 5% of the value of the property or €20,000 - whichever is lower. The rebate is only available on properties valued at €500,000 or less.
This means that if you purchase a property for €400,000, you can claim the maximum rebate of €20,000.
Well, yes… sort of. In order to claim, you must have paid the equivalent amount of income tax and DIRT in the preceding four years. So, if you are applying for €10,000, you must have paid at least that much to Revenue over the last four years.
The Help to Buy Scheme will run until 31 December 2019.
Any first-time buyer of a newly built home can apply for a tax refund under the Help to Buy Incentive. BUT if one applicant is a first time buyer and another applicant is not, you cannot apply for the grant. Also, to qualify as a first time buyer under the scheme, you must not have previously purchased, built or inherited a home with any other person.
Only newly built homes and self builds are included in the Help to Buy Scheme. Conversions and restorations of old or derelict homes do not qualify, but conversion of a non-domestic building for residential use may qualify.
Yes, anyone who bought or built a qualified home from 19 July 2016 may apply. Also, qualifying homes purchased between 19 July 2016 and 31 December 2016 can be valued up to €600,000 and still be eligible for the scheme.
If you are applying for a refund on a self-built home the Revenue will use the approved valuation from your lender.
No. The purpose of the Help to Buy Scheme is to assist first time buyers to get the deposit necessary to buy a home. Therefore, you must take out a mortgage to buy the property, and the loan to value of that mortgage must be more than 70%. Also, the loan cannot have a guarantor.
There are three ways the Help to Buy tax refund can be paid:
If you bought your home between 19 July 2016 and 3 January 2017, you can apply for the grant and if approved, it will be paid directly to you.
If you complete your purchase after 3 January 2017, the grant will be paid directly to the builder or developer as credit against the purchase price or deposit.
If you have built your own home and completed it since 19 July 2016, you can apply for the grant and it will be paid directly to you.
Yes, you must use the property as your principal private residence for a period of five years. If you do not comply with this rule, the Revenue reserves the right to claw back the refund.
Yes, you will need ensure that the builder of your home is registered as a Qualifying Contractor with the Revenue if you wish to claim a refund under the scheme. The Revenue maintains a list of Qualifying Contractors which you can see here.
Yes, you should be able to. Once you complete an application, you will be shown the maximum relief available to you. You will also receive a HTB Number and an access code which can be provided to your lender to verify your Help to Buy Relief.
Yes. Here are some of the important ones.
You must have been fully tax compliant in the four years previous to the claim.
The Help to Buy Scheme is for owner-occupiers only. You cannot apply to the scheme as an investor or a landlord.
Revenue will confirm your application with the contractor that you are buying from, or your solicitor if you are building your own home. Solicitors and contractors need to be registered with Revenue for the Help to Buy Scheme.
If your new home is a self-build, it must be a qualifying residence and cannot be a building which was previously used, or suitable for use, as a dwelling. However, the Revenue says that properties which have never been used as a dwelling and are now being converted for residential use may qualify.
You can apply online through Revenue’s MyAccount service. And as long as you are tax compliant, Revenue will provide you with a summary of the maximum refund available to you.
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