The Help to Buy (HTB) is a scheme designed to help first-time property buyers with the deposit they need to buy or build a new house or apartment. The scheme provides that they must live in the property as their home.
When a first-time buyer buys or builds their home, the incentive will give them a refund of Income Tax and Deposit Interest Retention Tax (DIRT) that they paid in Ireland over the previous four years.
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:
newly built with the construction subject to Value Added Tax (VAT) 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 and
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.
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.
What do you need to do before you apply?
Before you apply, you must be registered for either:
myAccount, if you are an employee and pay tax through PAYE
Revenue's Online Service (ROS), if you are self-employed.
If you pay tax through PAYE
Before you apply for HTB, you must submit a Form 12 for each year you wish to apply for a payment and pay any outstanding tax due.
Use myAccount to submit a Form 12 for the years from 2013. Online Form 12s are pre-populated with your pay and tax details.
If you need to submit a Form 12 for 2012, you can download the form and submit on paper. When you have completed this form, you can scan it and then upload it in MyEnquiries. To do this, you should:
click 'Add new enquiry'
select 'Help-To-Buy scheme' from the dropdown options available under 'My Enquiry relates to'
select 'Form 12 (2012)' from the dropdown options available under 'And more specifically'
attach the scanned pages of your Form 12
submit your enquiry.
If you are self-employed
If you are self-assessed, you must be fully tax compliant and have tax clearance. You must have filed your income tax returns and paid all the tax that you owe for any years where you were self-employed. Use Revenue Online Service (ROS) to submit your Form 11.
Four year rule
You may have signed your contract to buy a new build or drew down the first part of your mortgage for a self build between 1 January and 31 March 2017. If so, you may select the year of purchase to be the actual year you bought or built your home or the previous year provided you make your application before 31 May 2017. This will allow you to select the four year period which is of most benefit to you.
For example, if your contract or draw-down date is 2 February 2017, you may choose whether that took place in either 2016 or 2017. If you choose 2016, this will allow you to use your Income Tax and DIRT for the four years from 2012 to 2015. If you choose 2017, you can use the years from 2013 to 2016.
Information for lending institutions, solicitors and contractors
Lenders can confirm the maximum relief available to a HTB applicant using their application code and access number. Applicants should give these details to their lender.
The HTB refund may change once the purchase price of the property is confirmed.
See the Summary Guide for lending institutions for further information on this process.
If a HTB applicant is self-building a house, his or her solicitor must verify the claim. Solicitors must first apply to Revenue to be a registered solicitor for the HTB incentive.
To be a registered solicitor for verifying HTB claims for self-builds, solicitors must submit a completed HTB2 form through MyEnquiries in ROS. This should be submitted using the MyEnquiries category ‘Help to Buy Scheme – Solicitor Approval’.
See the Summary Guide for Solicitors for further information on this process.
Contractors who wish to operate the HTB incentive need to provide Revenue with:
- evidence that they are tax compliant. This means that they must have a Relevant Contracts Tax (RCT) rate of zero or 20%.
- their Value-added Tax (VAT) registration details
- evidence that they have an up-to-date Tax Clearance Certificate
- details of the qualifying properties which they offer, or intend to offer, for sale during the time that the incentive is available
- details of the planning permission for the properties which they intend to build during the time that the incentive is available
- details of the freehold, leasehold estate or interest in the land on which the qualifying properties are built or to be built
- any other relevant information that Revenue need to assess their application.
See the Summary Guide for Contractors for further information on this process.
When registering, contractors should:
- click 'Add new enquiry'
- select 'Help-To-Buy scheme' from the dropdown options available under 'My Enquiry relates to'
- select 'Contractor approval' from the dropdown options available under 'And more specifically'
- attach the necessary information and supporting documentation, as listed above. They may attach up to 10 files, with each attachment up to 10MB in file size.
- confirm that they agree to allow Revenue to publish their details as 'qualifying contractors'
- submit the enquiry.
Can Revenue claw back a refund?
Revenue can claw back refunds if:
- you were not entitled to the refund
- you do not live in the property for a minimum of five years
- you did not finish the process to buy the property
- you did not finish building the property.
- the property is not bought by you within two years from when the refund was made to the contractor
- Revenue has reasonable grounds to believe that the property will not be bought by you within that two-year period.
- almost complete at the end of the two years
- likely to be completed within a reasonable time period.
Published: 19 May 2017