The Help To Buy Scheme
This scheme was set up to give a rebate to first-time buyers for tax that they paid over the previous 4 years. It’s intended to help you buy your first house. Read on to see if you meet the requirements to benefit form the scheme.
How can you apply?
You need to be a first-time buyer. Second-hand purchasers don’t apply. If more than one person is buying, each one needs to be a first-time buyer.
In order for you to qualify for the rebate, the property must be bought and built between 19th July 2016 and 31st December 2021. It must be your Principal Private Residence. You must be tax compliant and must live in the property for 5 years after getting the rebate.
How does the property qualify?
Both you and your property must meet the individual criteria. If either doesn’t meet every requirement then the rebate won’t be paid.
You must be tax compliant and the amount of rebate that you receive must have been paid in tax in the previous four years. This is a tax rebate, so you can only receive monies back once you have paid that sum in tax.
How much is available?
The lesser of: €20,000, 5% of the property value or the amount of income tax or D.I.R.T. that was paid in the previous four years.
How is the percentage calculated?
The property is given a purchase value. In new build, this will be the contract price. For properties that you build yourself, the purchase value is the valuation that is given to you by a mortgage bank.
What properties qualify?
– New houses
– Renovations and conversions do not apply.
– Conversion of non-residential properties to residential may apply.
How is the purchase value calculated?
For a new build, the value will be the contract price – how much you have agreed to pay the builder.
For a self-build, the amount will be the valuation that you get from the bank when they are preparing your loan approval. The loan must be taken out for the purposes of building the house. It can’t be used for anything else. There is one further requirement – the loan must amount to at least 70% of the completion value. So if you’re building a house with a purchase value of €500,000, then your loan would have to be at least 70% of that figure – €350,000. If it doesn’t meet this amount then you won’t apply for the rebate.
Are there special requirements for the builder?
Yes – the builder must be registered as a Qualifying Contractor from the list maintained by the Revenue Commissioners.
If I’m buying for cash, can I apply for the rebate?
No. You must be taking out a mortgage and that must amount to at least 70% of the purchase value. So if you’re buying for €500,000, you must be borrowing at least €350,000.00
Can I apply if I have a guarantor?
No, if you have a guarantor then you won’t apply.
Do I have to live in the property?
Yes – the rebate is only available on the applicant’s principal private residence and must be lived in as such for at least 5 years after the rebate. If you move out of the property before that time, then the Revenue is entitled to seek repayment of the sum.
Are there any requirements for my solicitor or builder?
Yes, the builder must be on a list of Qualifying Contractors that is maintained. In the case of a self-build, your solicitor must also be registered with the Revenue.
How much can I claim?
The rebate is only available on properties valued at €500,000 or less.
The maximum rebate payable is 10% of the property value or €30,000 – whichever is the lower.
How do the rates work out?
|House price||Relief Available||Rate|
|€400,000||€30,000||Capped at €30,000|
|€500,000||€30,000||Capped at €30,000|
I’ve heard the rates have changed – is this true?
Yes, the government made changes to the Scheme in July 2020. From this date, the rates were set at the table above.
If you had already applied under the old rates, you are now allowed to withdraw the application and re-apply.
If you have signed contracts or have drawn down any part of the mortgage sum before 23rd July 2020, then you’re not allowed to re-submit an application. In those circumstances, you can continue with your application which will be processed under the old rates which are set out in the table below.
|House Price||Relief Available||Rate|
Will the scheme change again?
It’s certainly possible. In its pre-budget submission, the Law Society has recommended that the scheme be altered so that second-time buyers can also apply.
We will post details of any changes to the scheme as soon as the budget is ann
When does the Help-To-Buy scheme end?
The scheme is due to expire on 31st December 2020. The previous scheme rate of €20,000 will still continue until 31 December 2021.
Have more questions about the House To Buy Scheme?
Contact us by completing the form below.
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