Understanding Ireland’s Help to Buy (HTB) Scheme
Learn eligibility criteria, tax refund calculations, clawback rules, and expert tips from Portobello Spring.
What is the Help to Buy (HTB) Scheme in Ireland?
The Help to Buy (HTB) scheme is a government initiative designed to assist first-time buyers in purchasing or building their first home. Introduced in 2016, it provides a refund of income tax and DIRT paid over the previous four years, up to €30,000 (enhanced rates) or €20,000 (original rates). The scheme has been extended to 31 December 2029, making it a critical tool for aspiring homeowners.
Key Features of the HTB Scheme
- Tax Refund: Up to 10% of the property’s purchase price (enhanced rates) or 5% (original rates).
- Maximum Relief:
- €30,000 for contracts signed between 23 July 2020 – 31 Dec 2029.
- €20,000 for contracts signed between 19 July 2016 – 22 July 2020.
- Property Threshold: Purchase price or valuation must not exceed €500,000.
Am I Eligible for Help to Buy?
To qualify, you must:
- Be a first-time buyer (never owned/co-owned a dwelling).
- Purchase or self-build a newly constructed home (not refurbished or derelict).
- Occupy the property as your main residence for 5 years.
- Secure a mortgage with a 70% loan-to-value (LTV) ratio from a qualifying lender (e.g., banks, local authorities).
- Be tax compliant (PAYE or self-assessed).
Example: A couple purchasing a €450,000 new build with a €315,000 mortgage qualifies for up to €30,000 under enhanced HTB.
Understanding Ireland’s Help to Buy (HTB) Scheme
How Much Can You Claim?
Your HTB refund is the lowest of:
- €30,000 (enhanced) or €20,000 (original).
- 10% or 5% of the property’s purchase price/valuation.
- Total income tax + DIRT paid over the previous four years.
Example: If you paid €25,000 in taxes over four years and buy a €300,000 home, you’ll receive €25,000 (10% of €300k = €30k, but capped by taxes paid).
Step-by-Step Application Process
- Pre-Application:
- Ensure tax compliance (file returns, clear liabilities).
- Confirm your contractor is Revenue-approved (for purchases).
- Apply Online: Submit via Revenue’s myAccount or ROS. Receive an Application Number and Access Code.
- Claim Stage: Provide documents (loan offer, purchase contract, valuation report).
- Verification: Contractor (purchase) or solicitor (self-build) confirms details.
- Payment: Refund issued to your lender or contractor.
Deadline Alert: Applications expire annually on 31 December.
Understanding Ireland’s Help to Buy (HTB) Scheme
Avoiding Clawbacks: Critical Rules
The HTB refund must be repaid if:
- Occupation ends early: Repay 20–100% based on the exit year (see table below).
- Self-build not completed in 2 years: Full repayment required.
- False claims (e.g., incorrect LTV ratio).
| Year of Exit | Repayment Rate |
|---|---|
| Year 1 | 100% |
| Year 5 | 20% |
Example: Selling in Year 3? Repay 60% of your HTB refund.
Recent Updates for 2024
- Local Authority Affordable Purchase Scheme: Affordable Dwelling Contributions now count toward LTV calculations for contracts after 11 October 2023.
- COVID-19 Concession: Underpayments from Pandemic Unemployment Payments (PUP) won’t block HTB eligibility for PAYE taxpayers.
Why Partner with Portobello Spring?
Navigating HTB’s tax and compliance requirements can be complex. Our boutique firm specializes in:
- Tailored Tax Assessments: Maximize your refund by optimizing prior-year tax filings.
- Clawback Prevention: Ensure adherence to occupancy and completion rules.
- Application Support: Streamline documentation and avoid delays.
Disclaimer:
The information in this blog post is intended for general informational purposes only and should not be construed as professional advice. It is your responsibility to seek professional advice tailored to your specific situation.
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