The Help to Buy Incentive is designed to assist first-time buyers with obtaining the deposit required to purchase or self-build a new house or apartment to live in as their home. The measure, introduced by the Minister for Finance Michael Noonan in the budget last October, will allow purchasers to claim a rebate of income tax already paid over the previous 4 years up to a maximum of €20,000, depending on the value of the property.
To avail of this incentive you must meet the following criteria :
1. Be a first time buyer
2. Purchase or self build a new residence between 19 July 2016 and 31 December 2019 and
3. Be tax compliant
You must ensure that your contractor is a Revenue approved qualifying contractor before purchasing the property if you wish to avail of the Help to Buy Incentive, a list of whom can be found on the Revenue website.
For a property to qualify under the scheme, it must have been purchased or built as the first-time buyer’s home. It does not include properties acquired for investment purposes. It must be a new build and the construction must be subject to VAT in Ireland. Properties which have never been used as a dwelling and are now being converted for residential use may also qualify.
The purchase value of the property cannot be more than €500,000 if bought after 1 January 2017. For properties purchased between 19 July 2016 and 31 December 2016, the value cannot exceed €600,000. You must take out a mortgage of at least 70%-90% of the purchase price and you must also occupy the property for 5 years from the date that it is habitable. Cash buyers do not qualify.
What you need to do before you apply
Before you apply, you must be registered for myAccount (PAYE) or ROS (self-assessed).
PAYE taxpayers need to submit a Form 12 (where they have not already done so) for each of the previous 4 years. On receipt of your Form 12, Revenue will send you a Form P21 Balancing Statement. You must hold a Form P21 for each of the 4 years before you apply for the Help to Buy Incentive.
Self-assessed taxpayers must be fully compliant, have eTax clearance, and must therefore have paid and filed for the years in which they are a chargeable person.
How to apply
You can apply online. There are two stages to the Help To Buy process - an application stage and a claim stage.
A. Application Stage
You will be required to provide your PPSN, and complete a declaration. Provided that you are tax compliant you will be provided with an Application Number and a summary of the maximum relief available to you. You will also be issued with an Access Code. These codes should be kept safe as you will require them for your lender, contractor or solicitor.
B. Claim Stage
Once you have signed the contract for your home and are ready to make your claim, you must complete the following steps;
Step 1 – Upload the following information through MyEnquiries:
- a copy of the signed contract
- evidence of your mortgage (including loan-to-value ratio)
- proof of drawdown of the first tranche of the relevant mortgage (if a self-build).
Step 2 - You should then login to Help To Buy through myAccount or ROS and make your claim. You will need to include your MyEnquiries reference number. You will be asked to confirm details previously submitted. Once you have submitted your claim you will be provided with a claim number.
Please ensure you have carefully checked all the information you input before signing and submitting the claim. It will not be possible for you to cancel the claim afterwards.
Step 3 - Advise your Developer/Contractor, or, Solicitor if you are self-building, and provide them with your claim number and the access code already provided.
Before any refund is paid, the information you have given will need to be verified by the Developer/Contractor in the case of a new purchase, or a Solicitor, acting on your behalf, in the case of a self-build.
Note – the amount of the final refund will be subject to 5% of the purchase price of the house (maximum refund is €20,000) so it may differ from the maximum relief summary you received at application stage. Eg - Purchasing a house at cost of €300,000 - maximum relief due @ 5% is €15,000. However, if the total tax paid in the previous 4 years only amounts to €12,000 then this will be the maximum refund allowed.
Payments of the rebate will be made directly to the builder/developer as part of the deposit. In the case of a self build – the payment will be made directly to the bank providing the mortgage.
If you have any queries on any of the above or would like to know more about the scheme don't hesitate to contact us on 021 4641400 or email info@quintas.ie
