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Good News for First-Time Buyers!

By In Blog, Property On February 09, 2017


Help to Buy Incentive for First-Time Buyers

Once upon a time there were three little pigs, who decided it was time to gain some independence and move out of their parents’ house. However with tight budgets and rapidly rising property prices the little pigs were finding it difficult to hop on the property ladder. The first little pig chose to rent a house of straw, while the second bought an old house made of wood. However the third little piggy, a cleaver little guy, decided to use the Governments new Help to Buy Incentive to get himself his dream home…

Help to Buy Incentive in a Nutshell

The Help to Buy Incentive was introduced in Finance Act 2016, its objective is to enable first-time buyers to obtain the deposit required to purchase or self-build a new house or apartment.
The incentive works by providing 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.

Does this Incentive Apply to Me?

If you are:

  1. A first-time buyer
  2. Who purchases or self-build a new residence,
  3. Between 19 July 2016 and 31 December 2019, and
  4. You are tax compliant.

Then you may be entitled to claim a refund of Income Tax and DIRT paid over the past four years.

What Type of Property Qualifies for the Incentive?

There is, of course, some conditions to the incentive. To avail of the incentive the property you chose to buy/self-build must be:

  1. Purchased or built as a home and not as an investment property,
  2. A new build liable to Irish VAT,
  3. The purchase value cannot exceed €500,000 for properties bought after 1 January 2017 (€600,000 for properties bought between 19 July 2016 – 31 December 2016).
  4. You must take out a mortgage on the property which has a loan to value ratio of greater than 70%, for example if you purchase a new property for €490,000 you must have a mortgage on that property of at least €343,400.

How do I Apply?

There are two stages to the Help to Buy Incentive – an application stage and a claim stage:

1. Application Stage

a) You need to provide your PPSN and complete a declaration,
b) Once you are proven to be tax compliant you will be provided with an Application Number and a summary of the maximum relief available to you,
c) Next you will be issued with an Access Code.
Retain both the Application Number and Access Code safely as your solicitor or contractor will require them at a later date.

2. Claim Stage
Step 1 – Upload the following on MyEnquiries:

a) A copy of the signed contract,
b) Evidence of your mortgage,
c) Proof of drawdown of the first tranche of the relevant mortgage (if a self-build).

Step 2 – Make your claim:

a) Login to the Help to Buy through myAccount or ROS and make your claim.
b) You will be asked to confirm previously submitted details.

Please ensure that all the details are correct at this stage before submitting as you will not be able to change them later.

Step 3 – Advise your developer/contractor or solicitor

Before any refund is paid the information you have given will need to be verified by:

a) The developer/contractor in the case of a new build, or
b) A solicitor, acting on your behalf, in the case of a self-build.

You should note that the final refund will be subject to 5% of the purchase price of the property! Using the example above, a property with a purchase price of €490,000 would be subject to a maximum refund of €24,500.

We all know how the little pig’s story ends, the Big Bad Wolf comes along and he huffs and puffs and blows the straw and wood houses down! So if you’re thinking of buying your first home, don’t get caught out by the Big Bad Wolf, contact a member of our dedicated team and they’ll be happy to help you along the way to your Happily Ever After home.

Images: Shutterstock



About the Author

Peter Roberts

A Commerce graduate of UCC and a Fellow of the ACCA. Peter has worked with progressive owner manager businesses for over 25 years. He has gained experience from working in professional practices in both Ireland and the UK, culminating in the establishment of his own practice in 1997. Peter specialises in providing corporate compliance protection and assisting clients with the development of their business. Peter believes that high value can be provided to clients in helping them to structure the future development of their business.

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