Purchasing your first home is an exciting time, but can also prove stressful. With the pressures of a rising cost of living, many hope to use the Irish government’s Help To Buy (HTB) scheme in order to get on the property ladder. But navigating the ins and outs of Help To Buy is yet another complication for aspiring house buyers to understand. At Hickey Dorney, our team of specialist conveyancing solicitors are experts in all things property. Here is our guide to the Help To Buy scheme and how it can work for you.
What is the Help to Buy Scheme?
The Irish government established the Help To Buy scheme some years ago, in order to assist first time buyers with getting on the property ladder. The scheme aims to help first time buyers to raise the deposit for their property. It allows potential buyers to apply for a refund of the income tax and Deposit Interest Retention Tax they have paid over the past four years. In response to the COVID-19 pandemic and the harsh economic conditions it has created, the government has extended the HTB scheme. Until 31st December 2022, first time buyers can apply for e30,000, or 10% of the price of their desired property, or, if self-building, 10% of the completion value – whichever figure is lower.
Enhanced Help to Buy Scheme
If you have already applied for the original HTB scheme, you may still be able to benefit from the enhanced allowances. However, you will need to cancel your original application and re-apply under the new rules. The enhanced scheme covers contracts signed for new house purchases, and self-build mortgages drawn down between 23rd July 2020 and 31st December 2022.
Help to Buy Scheme Criteria
Although the Help To Buy scheme may seem very appealing, it is only available to those who meet the following criteria. You must be:
- A first time buyer
- Planning to live in the property – you cannot use this scheme to buy-to-let
- Borrowing at least 70% of the property value – cash buyers do not qualify
You must also live in the property for five years, from the date that it becomes habitable.
If you are buying or building the property with someone else, they must also be a first time buyer. If one of you has previously owned property, even if they are now divorced or separated from that person, nonetheless your purchase will not qualify for the HTB scheme. However, if you have inherited or been gifted a property, it will not affect your eligibility.
While the scheme can potentially provide up to e30,000, applicants can only apply for an amount based on how much income tax and DIRT they have paid in the past four years. If they have paid less than e30,000 in tax in the last four years, then the amount they can apply for will be the total amount of tax they paid.
Additionally, the scheme will only cover certain properties. To be covered by HTB, a property must be:
- a new build
- worth no more than e500,000
- purchased from a qualifying contractor who is registered with Revenue.
How to apply for the Help top Buy Scheme
- If you pay tax through PAYE, you must register with Revenue’s myAccount service. Go to revenue.ie and provide your PPS number, full name, date of birth, phone number, email, and home address.
- If you pay tax through self-assessment, register for the Revenue Online Service (ROS).
- Before applying, an important first step is to make sure all outstanding taxes have been paid.
- You must then fill out Online Form 12 (if a PAYE tax payer), or Form 11 (if you pay tax through self-assessment).
- You will need access to myEnquiries in order to correspond with Revenue. PAYE tax payers can access this through myAccount; ROS tax payers can find it through the ‘My Services’ screen, which is under ‘Other Services’.
- Once your application is accepted, your tax refund can contribute to your house purchase. If you are buying a new build, the refund will be paid directly to the builder. If you are self-building, the money will go into a bank account you hold with your loan provider.
While it may seem initially complex and daunting, the HTB scheme can provide essential help to those struggling to get on the property ladder. Getting specialist help from property experts such as our team at Hickey Dorney can make navigating the process much smoother.
Contact Hickey Dorney Solicitors
If you are a first time buyer looking for a property solicitor in Cork, look no further than Hickey Dorney. Our team of specialist property and conveyancing solicitors can help you on your journey to home ownership. Let us guide you on the legal steps to purchasing or selling your home.