10 Things You Need to Know About Ireland’s Help to Buy Scheme
If like many first-time buyers, you are struggling to get your foot on the property ladder, it could be time to speak to your mortgage broker about Ireland’s Help to Buy (HTB) Scheme.
A government initiative set up in 2017, the HTB scheme is designed to help first-time buyers raise the deposit they need to buy or build a brand new home. It does this by refunding a percentage of the Income Tax and the Deposit Interest Retention Tax (DIRT) they have paid in the last 4 years, which could be as much as 5 per cent of the purchase price or €20,000 – whichever is lower.
Ireland’s Help to Buy scheme has already helped thousands of prospective buyers secure the property of their dreams, but it is due to expire in December 2019, and so you need to act fast if you are to benefit from the initiative and cash-in on this once-in-a-lifetime opportunity. Read on to find out everything you need to know about the government’s HTB scheme.
- Who Qualifies for the Help to Buy Scheme?
To qualify for the incentive, you need to be a first-time buyer who is buying or building a new home valued up to €500,000. If you are buying/building with a spouse or partner, they must also be a first-time buyer, or you will not qualify for the rebate.
- What Type of Properties are Included?
The Help to Buy Scheme applies to newly built homes only. The initiative does not apply to converted, renovated, or restored homes, nor does it apply to second homes, buy-to-let homes, or non-residential properties. If you are buying or building a new home, you must ensure that your developer or contractor is approved by Revenue. You can find a list of approved developers and contractors on the revenue.ie website.
- How Much Will I Get?
Those who qualify for the HTB initiative can claim up to 5% of the total value of their property or €20,000, whichever is lower. You must be fully tax-compliant in the four years leading up to your claim, and the rebate amount will depend on how much income tax and DIRT you have paid during that period. I.e. If you have only paid €10,000 in, you will only be able to claim up to €10,000 back.
- I’m Buying with my Friend/Partner. Can we Both apply for the HTB Scheme?
Yes, you can both apply for the scheme as long as you are both first-time buyers and you intend to purchase or self-build a newly built home. In this instance, your Income Tax and DIRT payments will be combined, but the maximum tax rebate amount of €20,000 applies per property, and not per person.
- Do I Have to Live in the House I Buy?
Yes. Any property purchased under the HTB scheme must be your principal private residence and you must live in it for at least five years. If you do not comply with this rule, any tax rebate you receive could be clawed back by Revenue.
- We Are Cash Buyers. Can We Still Apply?
No, unfortunately not. The Help to Buy Scheme is designed to help first-time buyers get the deposit they need to step onto the property ladder. Cash buyers do not qualify. You must take out a mortgage of at least 70% of the purchase price to be considered for this initiative.
- I Bought my House Last Year – Can I Still Apply?
Yes, anyone who purchased a new house or built a new home after 19th July 2016, could be eligible for the scheme, providing that they meet all criteria.
- Am I Entitled to a Tax Rebate if my Property is Valued Over €500,000?
No, the Help to Buy rebate is only available on properties valued at €500,000 or less, unless you purchased a new home between 19th July 2016 and 31st December 2016, when the original limit was set at €600,000.
- How Will My Help to Buy Refund be Paid?
This depends on when you purchased on your home. If you did this between 19th July 2016 and 3rd January 2017, the tax refund will be paid directly to you. If you completed after 3rd January 2017, the refund will be paid directly to your property developer as a credit against your purchase. If you built your own home, and you meet all HTB criteria, the grant will be paid directly to you.
- How Long Will the Help To Buy Scheme Last?
Ireland’s Help to Buy initiative is set to expire on 31st December 2019, and so those who intend to build a new house or purchase a new home are being encouraged to act now to avoid losing out on a rebate of up to €20,000. To find out if you are eligible, speak to your mortgage broker and take one step closer to becoming an Irish homeowner.