Help to Buy Incentive
The Help to Buy (HTB) incentive is a scheme for first-time property buyers. It will help you with the deposit you need to buy or build a new house or apartment. You must buy or build the property to live in as your home.
The incentive will give you a refund of Income Tax and DIRT that you paid in Ireland (minus any refunds you have already claimed). The refund will be from the four years prior to making the application.
Enhanced Help to Buy Scheme
The enhanced HTB relief provides that where applicants satisfy certain conditions, increased relief is available up to a maximum of €30,000.
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 2021
- 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 a Tax Clearance Certificate
- The contractor you are purchasing your home from must be approved by Revenue.
What Type of Property Qualifies?
To qualify for HTB, the property that you build or buy must be:
- Your home
- Newly built with the construction subject to 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:
- €20,000 (increased to €30,000 for enhanced relief)
- 5% of the purchase price of a new home. For self-builds this is 5% of the approved valuation of the property. This has been increased to 10% for those qualifying for enhanced relief.
- the amount of Income Tax and DIRT you have paid for the four years before you make your application.
The maximum payment is €20,000 per property (increased to €30,000 for enhanced relief). This cap applies regardless of how many people enter into a contract to buy a house.
USC or PRSI are not taken into account when calculating how much you can claim.
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 a bank account you hold with your loan provider.
If you pay tax through PAYE
Before you apply for HTB, you must submit an Income tax Return for each year you wish to apply for a payment and pay any outstanding tax due. You must have a Tax Clearance Certificate if you were registered for another tax in any part of the refund years in which you are applying for.
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 ROS to submit your Form 11.
Four year rule
You may have signed your contract to buy a new build or draw down the first part of your mortgage for a self build between 1 January and 31 March 2021. If so, you may select either the:
- year of purchase to be the actual year you bought or built your home
- previous year provided you make your application before 31 May 2021.
This will allow you to select the four year period which is of most benefit to you.
How do you apply for Help to Buy (HTB)?
Use myaccount or ROS to apply for HTB online.
There are two stages to the online process:
- the application stage
- the claim stage.