Expert Legal Support for First-Time Buyers

Buying your first home can be exciting but stressful. From understanding schemes like the First Home Scheme to managing contracts, understanding new legal terms and requirements, there’s a lot to handle. 

Below, we provide a complete guide for first-time buyers, with essential information to help you navigate the home-buying journey. Here is what you will learn:

• The First Home Scheme – What it is, how it works, and how it can help you buy or build your first home.
• Eligibility Criteria – Find out if you qualify as a first-time buyer or fresh start applicant, including property requirements, price limits, and mortgage conditions.
• Funding Details – Discover how much funding you can receive, how service charges work, and how the shared equity model benefits buyers.
• Repurchasing Equity Shares – Learn the process of buying back the government’s stake, including valuation requirements and examples.
• The Help To Buy Scheme – What it is, how it works, and how it can help you get on the property ladder.
• The Step-by-Step Process – From initial consultation to finalising your purchase, see how PJF Solicitors simplify the legal and administrative side of home-buying.
• Key Benefits for First-Time Buyers – Understand the advantages of expert legal advice, local expertise, and transparent costs with PJF Solicitors.
• FAQs for First-Time Buyers – We answer common questions about deposits, stamp duty, and government schemes to help you make informed decisions.

What is the First Home Scheme?

The First Home Scheme (FHS)  helps first-time buyers purchase or build new homes by providing up to 30% of the property cost in exchange for a shared equity stake. The scheme also extends to those building their first home or buying the property they currently rent under the Tenant Home Purchase Scheme.

Do I Qualify for the First Home Scheme?

The First Home Scheme (FHS) is designed to help first-time buyers and eligible individuals build or purchase their first home in Ireland. To qualify, you need to meet the following criteria:

1. First-Time Buyer or ‘Fresh Start’ Applicant

• First-Time Buyer
  You are considered a first-time buyer if you have never previously purchased or built a property to live in, either in Ireland or abroad.
• ‘Fresh Start’ Applicant
  If you previously owned a home but no longer have a financial interest in it due to divorce, separation, insolvency, or bankruptcy, you may qualify as a ‘fresh start’ applicant.

Important:
If you are purchasing with another person, they must also meet the criteria of being a first-time buyer or a ‘fresh start’ applicant.

2. Over 18 and Right to Live in Ireland

Applicants must be at least 18 years old and have the legal right to live in Ireland, such as Irish citizenship, permanent residency, or appropriate visa status.

3. Property Requirements

• New Homes Only:
  The scheme applies to newly built homes or properties under construction. It does not cover second-hand homes unless you are purchasing the home you are currently renting and your landlord is selling the property (Tenant Home Purchase Scheme).
• Building Your Own Home:
  If you are constructing your own home, the property must be built on a site you own or are purchasing. Additionally:

• The property must be a detached or semi-detached house.
• You must manage the build yourself or work with a contractor.

4. Price Limits for Your Area

The property you buy or build must fall within specific price limits based on your local authority area. These limits are designed to ensure affordability.

Here are some examples of the current price caps:

• Dublin City, Cork City, Dún Laoghaire-Rathdown, South Dublin, and Fingal:
  €475,000 for houses and €500,000 for apartments.
• Limerick City:
  €400,000 for houses and €450,000 for apartments.
• Waterford City:€375,000 for houses and €450,000 for apartments.
• Co Clare:€350,000 for all properties.
• Counties like Mayo, Donegal, and Kerry:
  €325,000 for all properties.

Note: Duplexes fall under the house price limits. These limits are reviewed periodically and adjusted based on the housing market.Taken from Daft.ie Stats as of 2024

How Much Funding Can I Get?

The First Home Scheme provides funding through a shared equity model, meaning you get financial assistance in exchange for the government and participating banks taking a stake in your home.

Key Points:

• Maximum Funding:
  Up to 30% of the property’s market value. However, if you’re also availing of the Help to Buy Scheme, this reduces to 20%.
• Minimum Funding:
  €10,000 or 2.5% of the property’s value, whichever is greater.

Service Charges:

The First Home Scheme does not charge fees for the first five years. After five years, a service charge applies if the equity share remains unpaid. These charges are:

• 1.75% of the equity amount for years 6 to 15.
• 2.15% for years 16 to 29.
• 2.85% for year 30 and beyond.

Example:
If the government’s equity share is €50,000, your service charge in year 6 would be €875 annually (€50,000 x 1.75%).

Service charges can be deferred under certain circumstances, such as financial hardship, but they must eventually be repaid.

Can I Buy Back the Equity Share?

Yes, you have the option to repurchase the equity share in your home, either fully or partially, at any time. Here’s what you need to know:

• Partial Buy-Backs:

• You can repay at least 5% of the original equity amount in a single transaction.
• You are allowed up to two partial buy-backs per year.

• Full Repurchase:

• You can repay the entire equity share in one payment, fully owning your home.

• Valuation Process:
  The repayment amount is based on your home’s current market value, not its original purchase price. A government-approved valuer must assess your property before you buy back the equity share.

Example:
If you purchased your home for €300,000 and the First Home Scheme contributed 10% (€30,000), but the home’s value increased to €350,000, you would need to repay €35,000 to buy back the equity share.

Additional Details:

• Any significant improvements you make to your home (e.g., extensions) that increase its value are excluded when calculating the equity share repayment.
• You must cover the cost of the valuation as part of the buy-back process.

Help to Buy (HTB) Scheme: A Boost for First-Time Buyers

The Help to Buy (HTB) scheme is another initiative aimed at helping individuals and families get on the property ladder. This government-backed incentive is designed to help first-time buyers with the deposit required to purchase or self-build a new home.

Under the scheme, you may be eligible for a tax refund of up to €30,000 or 10% of the property’s value (whichever is lower) to put towards your deposit. To qualify, the property must cost €500,000 or less, and you need to live in it as your primary residence.

Key Details to Keep in Mind:

• Eligibility: First-time buyers only. Applicants must also be tax compliant.
• Type of Property: New builds or self-builds.
• How to Apply: Online through the Revenue Commissioners’ MyAccount portal.
• Deposit Boost: You can claim relief based on your income tax and DIRT (Deposit Interest Retention Tax) paid over the last four years.

The HTB scheme has helped many first-time buyers turn their homeownership dreams into reality. However, the process can feel overwhelming if you’re unfamiliar with the requirements or application steps.

Why Choose PJF When Buying Your First Home

Expert Legal Advice

We offer clear guidance on contracts, mortgage terms, and legal obligations. Our solicitors review paperwork, protect your interests, and explain each step so you feel at ease.

Comprehensive Support

Our involvement covers the whole conveyancing process – from mortgage approval to final signing. This includes reviewing property details, sorting documents, and answering any questions. Our aim is to keep each stage running smoothly.

Transparent Costs

We provide a detailed breakdown of fees at the start. You know what to expect, so you can plan your finances without stress.

Local Expertise

We focus on your area, understanding property trends and regulations. This knowledge helps us give accurate advice, making your house-buying process more straightforward.

Service Process – How It Works

1. Initial Consultation: We review your circumstances.
2. Legal Support: Guidance through contracts, mortgage approval, and documentation.
3. Application Assistance: Assisting with the legal aspects of schemes like FHS and the Help to Buy initiative.
4. Final Stages: Overseeing contracts and ensuring a smooth transaction.

Buying your first home does not have to be overwhelming. With expert legal guidance from PJF Solicitors, you can navigate schemes like the First Home Scheme, manage contracts with confidence, and secure the funding you need to turn your dream home into a reality. Our team is here to simplify the process, provide transparent advice, and support you every step of the way.

First Time Buyers FAQs

How do I apply for the First Home Scheme?
You’ll need mortgage approval, proof of ID, and details about the property. PJF Solicitors can assist you with the legal aspects of the application.

What happens if I want to sell my home?
If you sell, you must repay the equity share in full. We will ensure all legalities are handled smoothly.

Can I rent out a room in my home?
Yes, renting a room while living in your home is permitted.

What am I entitled to as a first-time buyer?
First-time buyers in Ireland may be entitled to schemes like the First Home Scheme, the Help to Buy Scheme, and discounts on stamp duty where the property is a new build. These supports aim to make purchasing your first home more affordable.

What is the best option for first-time buyers?
The best option depends on your financial situation and property preferences. Combining the First Home Scheme with the Help to Buy Scheme can significantly reduce upfront costs and make homeownership more achievable.

How much deposit do first-time buyers need in Ireland?
First-time buyers typically need a deposit of at least 10% of the property’s purchase price. The Help to Buy Scheme can contribute to this amount if you qualify.

Do first-time buyers in Ireland have to pay stamp duty?
Yes, first-time buyers must pay stamp duty, which is generally 1% of the property’s market value for homes under €1 million. However, stamp duty benefits from a VAT reduction (where it is charged) on new builds.