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A brief guide to the Help to Buy (HTB) Incentive

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There’s help at hand for you in getting your deposit together as you take this really important step towards owning your own home. It’s a little scary but exciting at the same time and now with the new Government incentive it can become a reality for you. Just think – holding the key to your own door – they say that your home is your castle – your own space – and now the possibility is here so it’s time to explore your options:-

What is the Help to Buy (HTB) Incentive?
The HTB incentive is designed to assist first-time buyers with obtaining the deposit required to purchase a new home.

Who is entitled to claim?
A first-time buyer who purchases a new house, duplex or apartment between 19 July 2016 and 31 December 2019 may be entitled to claim a refund of income tax and DIRT tax paid over the previous four years. The first-time buyer must not have either individually or jointly with any other person (directly or indirectly), previously purchased or built a house or apartment.  Where more than one individual is involved in purchasing a new home, all of the individuals must be first-time buyers.

What conditions are attached?
The property must have been purchased as the first-time buyer’s home. It does not include properties acquired for investment purposes. Applicants must be borrowing at least 70 per cent of the value of the property. The property must be occupied by the first-time buyer, or at least one of the first-time buyers in the case of multiple first-time buyers, for a period of five years from the date the property is habitable. The purchase must take place between 19 July 2016 and 31 December 2019.

What am I entitled to claim?
First-time buyers are entitled to claim a refund of income tax and DIRT paid over the previous four years.  Universal Social Charge (USC) or Pay Related Social Insurance (PRSI) are not taken into account. The maximum rebate is 5% of the value of the property, up to a maximum of €20,000. The rebate is available only on properties valued at €500,000 or less. If the purchaser has worked in Ireland for fewer than four years, or has paid only limited income tax, the amount available in any rebate will be lower.

How do I apply?
Before you apply, purchasers must have registered with Revenue’s myAccount online service and complete a form 12 tax return for each of the years on which they are seeking a rebate of tax paid. People not yet registered with myAccount will need their personal public service (PPS) numbers to do so along with their date of birth, phone number, email and home addresses.  The can register at Self-assessed taxpayers must be fully compliant.

What information is needed to make a claim?
Once a purchaser is registered on myAccount they can make their claim.  To complete the online application process, first-time buyers will need to upload a copy of the signed contract as well as details of the property, its purchase price and the completion date. They will also need to provide details of the mortgage lender and of the mortgage, including the loan-to-value ratio.  Finally, they will need to upload the developer’s details. Once the claim is submitted, as part of the claim process, the details will need to be verified by the Developer/Contractor.

Can joint first-time buyers submit a claim?
Yes, two or more owners of the property can make a joint claim or can make individual claims. The maximum amount of relief available is €20,000 per property.

Can I make a claim as a first-time buyer if the joint owner isn’t a first-time buyer?
No.  All owners of the property must be first-time buyers to avail of the HTB relief.

Do I have to take out a mortgage to be eligible?
Yes. There is a requirement that the first-time buyer take out a mortgage of at least 70% of the value of the purchase price. Cash-buyers are not eligible for the incentive.

If I decide to rent my property or sell it within the five year time frame, from the date the property is habitable - does this mean the refund might be clawed back?
Yes, parties who avail of the scheme will need to live in the property for five years or face a potential clawback of the rebate granted.

Please note this document is for information purposes only and should not be relied upon as a basis for entering transactions without seeking specific, qualified professional advice.  It is intended as a general guide only.  While reasonable care has been taken in its preparation, neither Sherry FitzGerald nor any directors, employees or affiliates guarantee the accuracy or completeness of the information contained therein.