The Help to Buy incentive announced in Budget 2017 purpose is to assist first-time buyers with obtaining the deposit required to purchase or self-build a new house/apartment to live in as their home. The incentive provides for a refund of Income Tax and Deposit Interest Retention Tax paid over the previous four tax years to first-time buyers who purchase or self-build a new house or apartment to live in as their home. It is limited to a maximum of 5% of the purchase value up to a value of €400,000, therefore the refund is caped at €20,000.
This incentive is available for the period from 19 July 2016 to 31 December 2019.
Who can apply?
A first-time buyer who has never either individually or jointly with any other person previously purchased or built a house or apartment can apply. In a situation where more than one person is purchasing or building a new home, each person must be first- time buyers. The property must be occupied by the first-time buyer, or at least one of the first-time buyers in the case of multiple first-time buyers, within 2 years and for a minimum period of five years. To apply you must be tax compliant.
You must ensure that your contractor is a Revenue approved qualifying contractor before purchasing the property if you wish to avail of the Help to Buy incentive.
A full list of all qualifying contactors is available on the Revenue website here.
What is a qualifying property?
For a property to qualify under the scheme it must have been purchased or built as the first-time buyer’s home. It does not include properties acquired for investment purposes. The purchase value of the property cannot be more than €500,000 for properties bought after 1 January 2017. For properties purchased between 19 July 2016 and 31 December 2016 the value cannot exceed €600,000.
You must take out a mortgage on the property with a qualifying lender and this loan must be used solely for the purchase/building of the property. The loan should be entered into solely by the first-time buyer and the lender. The loan to value ratio must be greater than 70%.
At what stage can I make my claim?
To be eligible to apply for the Help to Buy incentive, a first-time buyer must have signed a contract to purchase a new build property on or after 19 July 2016. In the case of a self-build home, they must have drawn down the first tranche of the relevant mortgage on or after that date.
There are two stages to the online process – an application stage and a claim stage.
Application Stage –First-time buyers / self-builders apply online via Revenue’s myAccount(PAYE) or ROS systems(self-employed). You are then provided with an Application Number and a summary of the maximum relief available under the incentive. A mortgage provider, broker, qualifying contractor or solicitor can use this summary to verify the relief available to the applicant, for the purposes of mortgage approval or drawdown, or signing a house purchase contract.
Claim Stage – Applications will progress to the claim stage only if the applicant decides to purchase a property that is eligible for the scheme.
To make a claim, the claimant must confirm and provide documentary evidence of the details of the property, the purchase price, date of completion, mortgage and deposit paid. The claim can then be submitted online.
The information set out above is to act as a guide and is no substitute for specific advice that you would receive from us.