The Help to Buy (HTB) incentive was introduced in Budget 2017 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.
Revenue will process Applications from first-time homebuyers for financial support under the HTB Incentive from the 3rd January 2017.
The incentive provides for a refund of income tax and 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.
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 tax years.
The first-time buyer must not have either individually or jointly with any other person (directly or indirectly), previously purchased, or built a property. Where more than one individual is involved in purchasing or building a new home, all of the individuals must be first-time buyers.
The property must have been purchased or built as the first-time buyer’s home. It does not include properties acquired for investment purposes.
The property must be occupied by the first-time buyer, or at least one of the first-time buyers in the case of multiple first-time buyers (a group), for a period of five years from the date the property is habitable.
The First time buyer applicant must be borrowing at least 70 per cent of the value of the property.
How does it work?
First-time buyers either purchasing newly built homes or building their own can apply for rebates via a forms available on the website of the Revenue Commissioners – revenue.ie. These forms can be completed on line. The scheme allows purchasers to claim back a rebate on income tax or Deposit Interest Retention Tax (Dirt) on bank savings paid over the four years prior to the year they are buying or building their first home. If they have worked in Ireland for fewer than four years, or have paid only limited income tax or DIRT, the amount available in any rebate may be lower.
Are there any limits?
The maximum rebate is 5 per cent of the value of the property, up to a maximum of €20,000. The rebate is available only on properties valued at €500,000 or less.
The scheme is available only to owner-occupiers, not to the investment or buy-to-let market, and applicants will need to live in the property for five years or face a potential clawback of the rebate granted.
How to claim
All first-time buyers must be registered for PAYE or ROS. The Developer/ Contractor must also be on the approved list with Revenue. This can be checked on the Revenue website.
To make a claim, the applicants must enter the required information online, confirming the:
- contract is signed (a copy of the signed contract must also be uploaded)
- balance of the deposit is paid / total deposit
- property details
- purchase price
- purchase date/completion date
- mortgage institution details
- mortgage approval details (including loan-to-value ratio)
- details of each first-time buyer
- portion of refund agreed for each first-time buyer (if a group)
- details of the Developer/Contractor (if property purchased)
- details of the Solicitor (if a self-build)
- proof of drawdown of the first tranche of the relevant mortgage (if a self-build).
Once the claim is submitted, as part of the claim stage, the details will need to be verified by the Developer/Contractor in the case of a new build or a Solicitor, acting on the applicant’s behalf, in the case of a self-build before the refund will be paid.