Help to Buy Scheme for First Time Buyers
The help-to-buy incentive has been the focus of attention since Budget 2017 but considerable confusion still surrounds it. Put simply, to avail of this scheme you must be a first-time buyer, your mortgage must be for at least 70% of the value of the property, the property cannot be valued at more than €500,000, it must be newly built and buy-to-let properties are excluded, so you must live there yourself.
Purchases before Jan 1st 2017
The rules are slightly 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.
Q&A: How much will I get?
First time buyers can claim a tax rebate equal to 5% of the value of the new house. The tax rebate is available only to first time buyers to help them purchase a new home in Ireland. It is aimed at people who might not be able to afford to put down a 10% deposit.
When does the relief kick in?
The tax rebate can also be claimed on new homes that were bought since July 19th 2016.
When can I apply and to whom?
Applications will be made to Revenue from January 1st 2017
I’ve never filed a tax return. What’s that about?
Most PAYE taxpayers don’t routinely file tax returns unless they have non-PAYE income to disclose or additional reliefs to claim. However, Revenue says all help-to-buy applicants must file a Form 12 (the annual return for PAYE taxpayers) What exactly can I claim my rebate against? All my taxes?
The rebate can be claimed against any 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.
Will the rebate come in a lump sum and how long will it take to process approximately?
Yes, the rebate will be in a lump sum. The Department for Finance the intention is for applications to be processed quickly and efficiently so as not to delay or affect in any way the purchase of the property,” the department has stated.
Why must I take a 70 per cent mortgage out? I was trying to keep my mortgage as low as possible.
The Government view is that anyone who can afford to bear a bigger share of their mortgage is not in real need of support. My partner is a first-time buyer but I am not. Are we eligible?
No, you’re not. Long-standing rules on first-time buyers set down that all parties to the purchase must be first-time homeowners. If anyone signing the contract has previously owned a property, no first-time relief applies.
Will I be restricted in what I can do with my home if I take a rebate?
Revenue has disclosed that there will be a clawback arrangement under which it will coming looking for some of your rebate if you stop being an owner occupier of a property under the scheme, ie you rent out the property. The same goes if they find out you were economical with the truth on any previous property ownership or were not fully tax compliant. Contact us for more details at South East Financial Services.