Help to Buy incentive

Introduction

A new Help to Buy (HTB) incentive has been introduced. It is designed to help first-time buyers of newly built homes to assemble the required deposit. It also applies to once-off self-build homes.

The Help to Buy scheme provides for a refund of income tax and Deposit Interest Retention Tax (DIRT) paid over the previous 4 tax years.

Rules

If you are a first-time buyer who either buys or self-builds a new residential property between 19 July 2016 and 31 December 2019, you may be entitled to claim a refund of income tax and DIRT paid over the previous 4 tax years.

If you signed a contract to buy a property (or drew down the first tranche of the mortgage for a self-build) before 19 July 2016, you will not qualify for this incentive.

If you are buying (or self-building) the property with someone else, they must also be a first-time buyer. You will not qualify if you have previously bought or built a property, either individually or jointly with anyone else, even if you are now separated or divorced from that person.

The incentive only applies to properties that are bought or built as the first-time buyer’s home. It does not cover investment properties. Cash buyers do not qualify.

You must take out a mortgage of at least 70% of the purchase price (or, for a self-build, 70% of the valuation approved by the mortgage provider).

If you signed a contract to buy a property (or drew down the first tranche of the mortgage for a self-build) between 19 July 2016 and 31 December 2016, you may qualify for the Help to Buy incentive on a property costing up to €600,000.

With effect from 1 January 2017, the Help to Buy scheme only applies to properties costing €500,000 or less.

You must occupy the property for 5 years from the date that it is habitable.

Tax requirements

If you pay tax through PAYE, you must be registered for Revenue’s online myAccount service. If you are a self-assessed taxpayer, you must be registered for the Revenue Online Service ROS.

In all cases, you must be fully tax-compliant in respect of the 4 years immediately prior to your claim.

If you have not already done so, you will need to complete online Form 12 (PAYE) and Form 11 (self-assessed) in respect of each of those 4 years. You must also pay any outstanding taxes that are due.

Rates

Purchase price or valuation Amount of relief
Up to €400,000 Up to 5% of purchase price
Between €400,000 and €600,000, between 19 July 2016 and 31 December 2016 Maximum relief will be €20,000
Over €600,000, between 19 July 2016 and 31 December 2016 No relief
Between €400,000 and €500,000, from 1 January 2017 Maximum relief will be €20,000
Over €500,000, from 1 January 2017 No relief

How to apply

If you are a PAYE employee only, you can apply for the Help to Buy incentive through Revenue’s myAccount service.

If you are a self-assessed taxpayer, you can apply through Revenue’s Online Service (ROS).

You will also need access to MyEnquiries, a secure method of corresponding with Revenue.

  • If you are a ROS business user, you can access MyEnquiries from your My Services screen under ‘Other Services’
  • If you are a PAYE employee only, you can access MyEnquiries through myAccount

Further information

Read more about the Help to Buy scheme on revenue.ie.

Page edited: 13 June 2017