Help to Buy incentive

Introduction

The Help to Buy (HTB) incentive helps first-time buyers of newly-built homes to buy a new house or apartment. It also applies to once-off self-build homes. It only applies to properties costing €500,000 or less.

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

As part of the Government’s July Jobs Stimulus package, the relief available to first-time-buyers was temporarily increased until 31 December 2020. In Budget 2021, this increase has been extended until 31 December 2021.See ‘Rates’ below for information on the Enhanced Help to Buy Scheme.

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 2021, you may be entitled to claim a refund of income tax and DIRT that you paid over the previous 4 tax years.

You cannot claim relief on PRSI or USC.

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. If you have inherited or been gifted a property it will not affect your eligibility.

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). This is known as the loan to value ratio. You are allowed to have a guarantor on the loan. A guarantor is someone who agrees to have the responsibility to pay your mortgage if you don't or can't pay it, for example, a parent or close relative.

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

You must live in 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 for the 4 years immediately before your claim.

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

Rates

Enhanced Help to Buy Scheme

Under the July Jobs Stimulus package, the maximum relief available was temporarily increased. In Budget 2021, this increase has been extended to the 31 December 2021.

If you sign a contract for a new house or draw down on a self-build mortgage between 23 July 2020 and 31 December 2021, you are eligible for the increased relief – called enhanced relief.

You can claim relief on the lesser of:

  • €30,000
  • 10% of the purchase price of the property
  • 10% of the completion value of a self-build
  • The amount of income tax and DIRT you paid for the previous 4 years

If you have already made an application under the original scheme, you may meet the enhanced requirements. You should cancel your original HTB application and reapply to avail of the increased relief.

You can read more about the Enhanced Help to Buy Scheme on Revenue.ie.

All other conditions of the scheme stay the same.

Purchase price or valuation 1 January 2017 to 23 July 2020 23 July 2020 to 31 December 2021 2022
Up to €500,000 Relief of up to 5% of purchase price or €20,000 Relief of up to 10% of purchase price or 10% of valuation price on completion or €30,000 Relief will return to the lesser of 5% of the purchase price or €20,000 in 2022
Over €500,000 No relief No relief No relief

How to apply

There are two stages to the online process:

  • The application stage
  • The claim stage.

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

You can get full details of the process from Revenue.

How do I get the refund?

  • If you buy a new build after 1 January 2017, the refund is paid directly to the builder
  • If you self-build the property after 1 January 2017, the refund is paid to a bank account you hold with your loan provider

Further information

Read more about the Help to Buy incentive and how to apply on revenue.ie. You can also read Revenue’s Summary Guide (pdf) for full details on the HTB process.

Historical information

Between 19 July 2016 and 31 December 2016, first-time buyers who bought or self-built a property between €400,000 and €600,000 could get a maximum relief of €20,000.

Page edited: 14 October 2020