HELP TO BUY – A NEW INCENTIVE FOR FIRST TIME BUYERS IN IRELAND
First time buyers – Since January 2017 the maximum loan allowed is now 90% of the house value. That means a first time buyer have a deposit of 10% of the purchase value.
HELP TO BUY – What it means & Who is eligible?
This service is for anyone who:
• an individual who buys or self-builds a home or apartment for the first time
• is a first-time buyer of a home who buys or self-builds on or after the 19th of July 2016
• is a first-time buyer of a home or apartment who buys or self-builds the property as their home.
Are you a tax payer in last 4 years? (Both income tax and DIRT)
The government’s Help to Buy Scheme (HTB) will enable eligible first time buyers to get up to 5% of the purchase price of a new house or apartment back in the form of a tax rebate. This can then be used towards the deposit on the purchase.
The total tax rebate under HTB will be limited to the total income tax and DIRT paid over the previous four tax years and will be capped at €20k. If you have paid less than €20k income tax / DIRT in the past 4 years – the maximum rebate possible will be the amount of tax you paid.
Claiming as a group?
A group is made up of two or more people who are buying or self-building a home. A group can include a married couple. Before applying group, members should:
- 1 ensure they have the names and PPS Numbers of each member of the group
- 2 consent that their names and PPS Numbers will be visible to all group members
- 3 confirm that all members of the group are first time buyers
- 4 consent that any member of the group can allocate the tax available for each member
Purchases before Jan 1st 2017
The rules are different for houses bought or built between July 19th 2016 and Dec 31st 2016. These properties will be eligible for tax rebates on purchases up to €600,000 – but the rebate will still be limited to €20,000.
Homes purchased or self-built from 19th of July 2016 to the 31st of December 2016
Applicants who have purchased or self-built in these dates will be making their application retrospectively. These applicants must be apply on or before 31st March 2017
Purchases from Jan 1st 2017
The 5% tax rebate will only apply to houses priced up to €500,000. Still with a €20k cap.
Applications for Help to Buy
There are 2 stages to the HTB Application:
Stage 1 is to work out the maximum relief available to you under the scheme based on tax payments you made in the relevant years. You can apply before you choose a house or apply for a mortgage. Once you know the maximum rebate possible – you can then arrange a mortgage and/or sign a contract with a prospective Qualifying Contractor.
Stage 2 is When mortgages and contracts are signed you will need to complete the Help to Buy Claim where the exact rebate will be worked out based on purchase price.
Payments of the rebate will be made directly to the builder/developer as part of the deposit. The builder/developer must have registered with Revenue as a registered contractor under the Help to Buy Scheme. Only properties built by a registered contractor will be eligible.
In the case of a self-build – the payment will be made direct to the bank providing the mortgage.
Are you looking for professional advice?
Incorporated Public Accountants
Tel: 01 – 4416919
Mob: 0872257706 /0872450049