Who can claim the Help to Buy (HTB) incentive?
To claim HTB, you must:
- be a first-time buyer
- buy or build a new property between 19 July 2016 and 31 December 2019
- live in the property as your main home for five years after you buy or build it
- be tax compliant, if you are self assessed you must also have tax clearance.
To qualify, you must not have previously bought or built a house or apartment, either on your own or jointly with any other person. If you are buying or building the new property with other people, they must also be first-time buyers.
If you are buying the property, you must have signed a contract to buy that property on or after 19 July 2016. If you are self-building, you must have drawn down the first part of the mortgage on or after that date.
Approved developers and contractors
The contractor you are purchasing your home from must be approved by Revenue. You can check the list of approved developers and contractors to make sure that your developer or contractor is approved.
What type of property qualifies?
To qualify for HTB, the property that you build or buy must be:
- your home
- newly built with the construction subject to Value Added Tax in Ireland.
The property must never have been used, or have been suitable to use, as a residential home. If the property was non-residential, but has been converted for residential use, it may qualify for HTB. If you buy or build the property as an investment, it does not qualify for HTB.
The purchase value of a new build means the price that you bought it for. For self-built property, the purchase value is the approved valuation by the lender at the time that you took out the mortgage.
If you bought the property between 19 July 2016 and 31 December 2016, the purchase price must be €600,000 or less. If you bought it after 1 January 2017, it must be €500,000 or less.
You must take out your mortgage on the property with a qualifying lender. This loan must be used only for buying or building the property. The loan must be at least 70% of the purchase value of the property. This is known as the loan to value ratio.
You are allowed to have a guarantor on the loan.
How much can you claim?
The amount that you can claim is the lesser of:
- 5% of the purchase price of a new home. For self-builds this is 5% of the completion value of the property
- the amount of Income Tax and Deposit Interest Retention Tax(DIRT) you have paid in the four years before your purchase or self-build.
The maximum payment is €20,000 per property. This cap applies regardless of how many people enter into a contract to buy a house.
Universal Social Charge or Pay Related Social Insurance(PRSI) are not taken into account when calculating how much you can claim.
How will the refund be paid?
If you bought or built the property between 19 July 2016 and 31 December 2016, the refund will be paid directly to you.
If you buy a new build after 1 January 2017, the refund will be paid to the contractor.
If you self-build the property after 1 January 2017, the refund will be paid to the bank account of your loan provider.
If you would like to discuss buying a home then please get in touch with Fin at email@example.com or call 1890 998 911/ 01 685 4458.