The Help to Buy incentive is designed to assist first-time buyers with obtaining the deposit required to purchase or self-build a new house or apartment to live in as their home.
The incentive provides for a refund of Income Tax and Deposit Interest Retention Tax (DIRT) 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.
The main provisions, as set out in the Finance Act are outlined below.
WHO IS ENTITLED TO CLAIM?
A first-time buyer of a house or apartment who purchases or self-builds a new residential property between 19 July 2016 and 31 December 2019 may be entitled to claim a refund of Income Tax and DIRT paid over the previous four years.
The first-time buyer must not have either individually or jointly with any other person (directly or indirectly), previously purchased, or built a house or apartment. Where more than one individual is involved in purchasing or building a new home, all of the individuals must be first-time buyers.
Note: 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. See the list of Developers/Contractor who are registered as a Qualifying Contractor.
You must be tax compliant. If you are self assessed you must also have eTax clearance
|Purchase price or valuation||Amount of relief|
|Up to €400,000||Up to 5% of purchase price|
|Between €400,000 and €600,000, between 19 July 2016 and 31 December 2016||Maximum relief will be €20,000|
|Over €600,000, between 19 July 2016 and 31 December 2016||No relief|
|Between €400,000 and €500,000, from 1 January 2017||Maximum relief will be €20,000|
|Over €500,000, from 1 January 2017||No relief|
WHAT IS A QUALIFYING PROPERTY UNDER THE HELP TO BUY SCHEME?
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. It must be a new build and the construction must be subject to VAT in Ireland. Properties which have never been used as a dwelling and are now being converted for residential use may qualify.
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.
For self-built properties the purchase value means the approved valuation by the qualifying lender at the time that the qualifying loan is entered into.
You must take out a mortgage on the property with a qualifying lender and this loan must be used solely for the purchase or building of the property. The loan should be entered into solely by the first-time buyer and the lender. A guarantor on the loan is allowed. The loan to value ratio must be greater than 70%.
WHEN CAN I APPLY AND TO WHOM?
Applications will be made to Revenue – from January 2017 . Firstly Before you apply to the Help to Buy Scheme, you must be registered for myAccount (PAYE) or ROS (self-assessed). PAYE taxpayers need to submit a Form 12 (where they have not already done so) for each of the tax years they select. Online Forms 12 for 2013 onwards are available through myAccount and are pre-populated with your pay and tax details. A paper Form 12 for 2012 (PDF, 1.79MB) (if required) can be downloaded. When you have completed the paper Form 12, you can scan it and then upload it in MyEnquiries. To do this, you can click Add New Enquiry, and select ‘Help-To-Buy Scheme’ and ‘Form 12 (2012)’ from the dropdown options available under ‘My Enquiry Relates To’ and ‘And More Specifically’. Then you attach the scanned Form 12 documentation and submit your enquiry.
You can go back 4 years with these:
Once you have registered for the ROS system you then apply by:
There are two stages to the Help to Buy electronic process – an application stage and a claim stage.
A. Application Stage
You will be required to provide your PPSN, and complete a declaration. Provided that you are tax compliant you will be provided with an Application Number and a summary of the maximum relief available to you. You will be issued with an Access Code separately through My Enquiries. You should retain both of these safely as you will require them for your lender. If you are purchasing your home you will require these for your qualifying contractor, of if self-building you will require these for your solicitor. Your contractor or solicitor will require this information to verify the tax relief claim.
B. Claim Stage
Once you have signed the contract for your home and are ready to make your claim complete the following steps;
Step 1 – Upload the following information about your application through MyEnquiries. (You should take note of the reference number given).
- a copy of the signed contract
- evidence of your mortgage (including loan-to-value ratio)
- proof of drawdown of the first tranche of the relevant mortgage (if a self-build).
Step 2 – You should then login to Help to Buy through myAccount or ROS and make your claim. You will need to include your MyEnquiries reference number. You will be asked to confirm details relating to the property, the purchase price, date of completion, mortgage details, and the deposit already paid. Group applicants will also need to provide the amounts of the agreed portion of the refund applicable to each member of the group. Self-build claimants will need to provide the BIC and IBAN of the qualifying loan bank account. Once you have submitted your claim you will be provided with a claim number.
Please ensure you have carefully checked all the information you input before signing and submitting the claim. It will not be possible for you to cancel the claim afterwards.
Step 3 – Once the claim is submitted, you should advise your Developer/Contractor, or, Solicitor if you are self-building, and provide them with your claim number and the access code already provided. Before any refund is paid, the information you have given will need to be verified by
- the Developer/Contractor in the case of a new build, or
- a Solicitor, acting on your behalf, in the case of a self-build.
Note – the amount of the final refund will be subject to 5% of the purchase price of the house so it may differ from the maximum relief summary you received at application stage.
CLAIMS COMPLIANCE– CLAWBACK PROVISIONS
There are a series of clawback provisions which are linked to entitlement to the refund, ceasing occupation of a qualifying residence or non-completion of a purchase or non-completion of a qualifying residence. In the period from 1 January 2017 to 31 December 2019, contracts between first-time purchasers and qualifying contractors will result in the refunds being paid directly to the contractors as a credit against the purchase price or deposit of the qualifying residences.
‘Clawback’ from a qualifying contractor will happen where:
- the qualifying residence is not subsequently purchased by the claimant within two years from the date of the making of the refund payment to the contractor, or
- if, in the opinion of Revenue, there are reasonable grounds to believe that the purchase of the qualifying residence by the claimant will not be completed within that two year period.
- There will be some flexibility around the two-year period where Revenue are satisfied that the qualifying residence is substantially complete at the end of the two year period or is likely to be completed within a reasonable period of time thereafter.
- Once the residence is completed and conveyed to the first-time purchaser any further compliance responsibilities, such as the obligation to use the house as a principal private residence for a period of five years, become the sole responsibility of the purchaser as the developer cannot be held responsible for such matters.