Help To Buy (HTB) Scheme Explained

Conveyancing Solicitor: Guide to Buying Property in Ireland

The Help to Buy Incentive (HTB) was introduced by the government in the 2017 Budget. Its purpose is to assist first time buyers of new build properties to raise the deposit required to purchase their home.

The new scheme will allow purchasers to claim a rebate of income tax and DIRT, which they have already paid over the previous four years, up to a maximum of 10% of the purchase price or €30,000 (whichever is the lower). The rebate will be further limited to the amount of Income Tax/DIRT actually paid over the previous four years.

To avail of the scheme you must meet the following criteria:-

• You must be a first time buyer. If you are buying the property with another person, they must also be a first time buyer. You will not qualify if you have previously built a property.
• You must be taking out a mortgage for at least 70% of the purchase price (or in the case of a self build 70% of the valuation price provided by the lending institution). You cannot avail of the scheme if you are a cash buyer/investor.
• If you signed a contract (or drew down your first stage payment in the case of a self-build) between the 19th July 2016 and the 31st of December 2016, the valuation/purchase price of the property cannot exceed €600,000.
• If you are purchasing/drawing down a first stage payment after the 1st of January 2017 the purchase price/valuation of the property cannot exceed €500,000.
• You must occupy the property for five years as your home. If more than one person is purchasing the property it is only necessary that one of them is going to live in it as their home. If you leave the property during this time there will be a clawback payable to Revenue.
• You must have paid either Income Tax or DIRT in the four years prior to applying for the rebate. The Universal Social Charge and PRSI are not taken into account in calculating the amount of the rebate.
• Your tax affairs must be up to date.
• The Contractor/Developer that you are purchasing from must be registered with the Revenue as a qualifying contractor. There is a list of the contractors that have signed up to the scheme on the Revenue Commissioners website, www.revenue.ie
• The maximum amount that you will receive in a rebate is 10% of the purchase price up to a limit of €30,000. However, you will not receive a rebate in excess of the Income Tax or DIRT which you paid over the previous four years. For example, if you are eligible for a rebate of €10,000 but you only paid €8,000 in Income Tax in the previous four years, the amount of the rebate will be €8,000.
• The scheme will run until the 31st of December 2021.

It is an entirely electronic process consisting of two stages, the Application stage and the Claim stage. You may complete the Application stage before entering into an agreement to purchase in order that you can work out the maximum relief available to you based on the tax which you have paid in the previous four years. With this information to hand you may then proceed to enter into a mortgage or contract with the developer/contractor. When the loan offer/contract is signed you can then proceed to the Claim stage where the exact rebate will be worked out according to the purchase price/valuation.

To apply for the scheme you will need to be registered with Revenue’s online “My Account Services” if you are a PAYE worker or ROS if you are self-assessed, www.ros.ie.  As mentioned above, your tax affairs must be in order.  If you are PAYE worker you will complete a form online, (the website will pre-populate a lot of the information for you). If you are self-employed you will complete a Form 11.

In the Claim stage you will need to upload a copy of your contract as well as details of the property and the mortgage lender using the “My Enquiries” section on the Revenue website. Once the claim is submitted Revenue will seek verification from the developer/contractor in the case of the purchase of a new house or from your solicitor in the case of a self-build (you will need to provide the developer/contractor/solicitor with your HTB access number and application code).

Following this verification the Revenue Commissioners will issue the rebate directly to the Contractor/Developer in the case of the purchase of a new property or to the lending institution in the case of a new build.

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 Guide to Purchasing a Property

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