The Help to Buy (HTB) incentive is a scheme to help first time property buyers. It helps with the deposit needed to buy or build a new house or apartment. In order to claim the HTB scheme, you must:
- Be a first-time buyer
- Take out a mortgage that is at least 70% of the purchase value of the property
- Be tax compliant
- Live in the property for a minimum of 5 years after purchase
To qualify, you must have not bought or built a house or apartment previously on your own or jointly with any other person. You will still qualify for HTB if you have previously inherited or have been gifted a property.
The HTB scheme is back dated to include homes bought from 19 July 2016 and will be available to 31 December 2019. If the property was purchased between 19 July 2016 and 31 December 2016, the price of the property must be €600,000 or less. If the property is bought between 1 January 2017 and 31 December 2019, the property must cost €500,000 or less.
The amount you can claim is the lessor of the following:
- 5% of the purchase price of the new home.
- The amount of Income Tax and Deposit Interest Retention Tax (DIRT) you have paid in the previous 4 tax years.
Regardless of the amount of people who enter into the contract to buy or build the property, the cap of €20,000 applies. Universal Service Charge (USC) and Pay related Social Insurance (PRSI) are not considered when calculating the amount you are entitled to claim.
If you purchased or built the property between 19 July 2016 and 31 December 2016, the refund will be issued directly to you. If you buy a new build between 1 January 2017 and 31 December 2019, the refund will be issued to your contractor. The contractor must be approved by Revenue. If you self-build, the refund is paid to a bank account held with your mortgage provider.
Revenue may clawback the refund if:
- You do not live in the property for 5 years
- You do not complete the process to buy the house
- You were not entitled to the refund
- The property is not completed
Once the property is built or bought, you have the sole responsibility of complying with the conditions for the HTB refund.
If you require any assistance with HTB or further details on the above, please contact us.