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Defects Scheme for Apartments and Duplexes
The Help to Buy Scheme in Ireland
The Help to Buy Scheme is a government initiative in Ireland designed to help first-time buyers get onto the property ladder. The original scheme was launched in 2016 and expired in July 2020. Currently applicants can qualify for the enhanced Help to Buy Scheme which is open to until the 31st December 2024. The scheme is administered by the Revenue Commissioners on behalf of the government.
Under the scheme, first-time buyers of houses or apartments can claim a tax rebate of up to 10% of the purchase price of a newly built property, up to a maximum of €30,000. The scheme applies to properties that are valued at €500,000 or less, and the rebate for the enhanced scheme is available on properties purchased between July 23rd 2020 and December 31st 2024. The Scheme is also available for self-build homes that meet the criteria.
To be eligible for the scheme, buyers must:
- Be first-time buyers who have not previously owned a property, either in Ireland or abroad.
- Purchase a newly built home that has not been previously occupied, or that has been previously occupied for less than six months.
- Obtain a mortgage to finance at least 70% of the purchase price of the property.
- Be tax compliant and up-to-date with their tax affairs.
Where applicants meet the required conditions, they will receive a refund of Irish Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland subject to the cap of €30,000.00 and based on the taxes paid for the four years prior to the date of application.
Note that the contractor you are purchasing your home from must be an approved contractor and registered on the list maintained by the Irish Revenue Commissioners. This list should firstly be checked by any applicant that requires the assistance of the Help to Buy scheme. If you are completing a self-build, in the place of a registered contractor, you will require your solicitor to be registered with Revenue as a ‘HTB approver’ to verify your HTB claim.
To qualify for the scheme that property must never have been used, or have been suitable for use, as a residential home. If the property was non-residential, but has been converted for residential use, it may still qualify for HTB. Investment properties built or purchased do not qualify for HTB.
How to Apply
Before starting the process, applicants must ensure they are tax compliant. All PAYE employees can assume this to be the case. Applications must be made to myAccount or Revenue Online Service (ROS). Once the online Declaration is completed applicants can select the years to use for a refund.
Once it is confirmed that an applicant is tax compliant, they will be approved and given the following important information:
- an Application Number
- a summary of the maximum amount you can claim
- an Access Code (sent through MyEnquiries).
These are important details and should to retained. Each Lender, the builder contractor and the solicitor acting in the purchase will require this information at the stage of contract, at verfification stage and/or before the completion of the purchase.
Clawback of the Money Paid
Bear in mind that there are clawback provisions which apply to the money paid under the Scheme. These are the grounds upon which the Revenue can seek a refund of the money released to any applicant which include:
- Applicants who were not in fact entitled to the refund
- Applicants who do not live in the property for a minimum of five years
- If any applicant does not finish the process to purchase the property
- If any self-build applicant does not finish building the property.
In some instances the Help To Buy payment is released to the contractor or developer at contract stage as part of the contract deposit payable at that time. Revenue have also made provisions in these cases to claw back refunds from the contractor, such as:
- the property is not purchased within two years from when the refund was made to the contractor
- Revenue has reasonable grounds to believe that the property will not be purchased within that two-year period.
Revenue can show flexibility around the two-year period which is applied at their discretion, for example if Revenue is satisfied that the property is either:
- almost complete at the end of the two years
- likely to be completed within a reasonable time period.
Once the property is completed and purchased applicants must comply with the original conditions for the Help to Buy refund principally the requirement to reside in the property as their principal residence for at least five years. The developer is no longer responsible after this point.
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