The Government has announced a new scheme to help first time buyers. Under the scheme, first time buyers can claim a tax rebate equal to 5% of the value of the new house (up to a maximum of €20,000) they are buying from January 2017. The scheme is only available to those purchasing “new” homes in Ireland. A New home is defined as “a new building which was not previously used, or suitable for use, as a dwelling.” Second hand homes are not eligible for the scheme. The scheme is aimed at people who might not be able to afford to put down a 10% deposit in line with Central Bank Mortgage Rules. The tax rebate can also be claimed on new homes that were bought since July 19th 2016, however if you signed a contract to buy a property (or drew down the first tranche of the mortgage for a self-build) before 19th July 2016 you will not be eligible for the Help to Buy Scheme
The Help to Buy scheme is due to finish at the end of 2019.
How it Works
The scheme operates by way of a tax rebate. The government’s Help to Buy Scheme (HTB) will enable eligible first time buyers to get up to 5% of the purchase price of a new house or apartment back in the form of a tax rebate. This can then be used towards the deposit on the purchase. The total tax rebate under HTB is limited to the total income tax and DIRT paid over the previous four tax years and is subject to a maximum tax rebate of €20,000. If you have paid less than €20,000 income tax / DIRT in the past 4 years – the maximum rebate possible will be the amount of tax you paid.
Purchases Before Jan 1st 2017
Houses bought or built between July 19th 2016 and Dec 31st 2016 are eligible for tax rebates on purchases up to €600,000– but the rebate will still be limited to €20,000.
Purchases from Jan 1st 2017 – The 5% tax rebate will only apply to houses priced up to €500,000 again subject to a maximum rebate of €20,000.
For more information on the Help to Buy Scheme click here.
To discuss the scheme with one of our property experts contact Maeve Callanan, Elisa McMahon or Catherine Dundon