The Help To Buy Scheme – how does it work?

The Help to Buy Scheme was created to help first-time buyers get on the property ladder and it’s turned out to be very helpful for many people buying their first home.

We’ve put together this overview of the Scheme and how it works so that you can determine whether or not you can make an application.  As always, if you want any more information then feel free to get in touch by completing the form at the bottom of the post.

What is the Help To Buy initiative?

Help To Buy was introduced to help first-time buyers come up with the deposit for their new home. It works by giving tax-payers a rebate on the tax they have paid over the previous four years.

The Scheme has been altered a bit over the last two years as the government made changes to take account of the impact of Covid, but the general nature of who can apply has more or less remained the same and there are specific requirements that must be met by the purchaser and others that apply to the property.

Deciding whether you qualify or not will depend on two separate things – whether you qualify as the purchaser and whether the house you’re buying can meet the requirements too.  It’s no use if you qualify as the purchaser but the house you’re buying is not the type that was intended.  Both the purchaser and the house must be the type set out in the Scheme; otherwise you won’t be approved.

Who can qualify?

The only people who can apply for the Scheme are first-time buyers who are buying their principal private residence (PPR).  So second-time buyers are ruled out, as are investors.  There was some indication that the Scheme might be extended to include second-time buyers in Budget 2022, but that wasn’t the case and the Scheme remains one that is only applicable to those buying their first home.

If the house is being bought with another person, they must also be a first-time buyer, but if a guarantor is involved, you won’t necessarily be unable to apply if they’re not a first-time buyer.

You must live in the property for 5 years after getting the rebate, otherwise the Revenue can seek a refund of the monies.

You must also be tax compliant.

The property must be built or bought between 19th July 2016 and 31st December 2021.

The house can only be a new build or self-build.  You can’t apply if you are carrying out renovations to the house because the Scheme only applies to new builds or self-builds.  It can only be used as a residence, so any property used for commercial or other non-residential use will not meet the requirements.

How much can you apply for?

The Scheme is based on the purchase value of the property and this will differ depending on whether you’re buying a new-build or self-build property.

  • New-Build

The purchase value for a new-build property will be the sum that you are required to pay to the contractor for the works carried out.  This will be a straightforward figure that is given to you by the contractor and it is also set out on the documents sent to your solicitor from the vendor’s solicitor at the outset of transaction.

  • Self-build

When you are building your own house, the purchase value will be determined by the amount that you borrow from a lending institution.  The amount you’re borrowing must amount to at least 70% of the overall costs of completion, and this is a very strict requirement.

So, if your overall completion costs are €500,000, then you must be borrowing at least €350,000 to qualify for the Scheme.

How much can you claim?

When you’re thinking about how much you can claim back, it will not only depend on the items already mentioned, but also on the date you apply for.  This is due to the fact that the Scheme has been extended to take account of any changes in circumstances of housebuyers that have been caused by the pandemic.  This resulted in the claim amounts being increased, under an amended system called “Enhanced Relied”.  So there are a few dates to take into account.

19th July 2016 to 22nd July 2020

If you signed a contract or drew down the first stage-payment of your mortgage between these two dates, then you can claim the lesser of the following:-

  • €20,000 or
  • 5% of the purchase price or
  • The amount of income tax or Deposit Interest Retention Tax (D.I.R.T.) you’ve paid in the previous 4 years.

23rd July 2020 to 31st December 2021 (and onwards)

If you signed a contract or drew down the first stage-payment of your mortgage between these two dates, then you can claim the lesser of the following:-

  • €30,000 or
  • 10% of the purchase price or
  • The amount of income tax or D.I.R.T. you’ve paid in the previous 4 years.

What happens if you’ve already submitted your application and now the Enhanced Relief is in place?

Unfortunately, when a system of Enhanced Relief is put in place, you’re always going to see some people who miss out on it because they’ve passed the cut-off point.  But don’t worry, this won’t necessarily be the case.

If you’ve already submitted your application but you haven’t signed a contract or drawn down any funds by the time the Enhanced Relief came into effect, you can still avail of the increased rates by withdrawing your original application and submitting a fresh one. If you can do this then you can still avail of the higher rate, so it’s something that you should certainly look into if your transaction has been delayed for some reason.

How will my refund be paid?

For properties that were bought or built between 19th July and 31st December 2016, the refund was paid directly to the claimant.  If you bought after 1st January 2017, the money was paid directly to the contractor (unless it’s a self-build, in which case the refund is paid into your bank account).

Is there a cut-off time for the Scheme?

The Scheme was originally intended to last until July 2021, and was then extended to December 31st 2021.  In this month’s budget the Government announced that it will be extended again into 2022, when the Scheme will be given a full review.  So there’s still time for you to apply.

How can you apply?

A full breakdown of the various steps involved, together with links to help with your application is available on the Revenue website here.


If you have any further queries about the Help To Buy Scheme or other aspects of the procedure for buying a house, fill out the form below and we’ll get in touch.




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