30/05/2019

30/05/2019

Help to Buy Scheme – Time is Running Out

As first-time buyers struggle to get on the property ladder all potential first-time buyers should note that the Help to Buy Scheme introduced in 2016 is due to expire on the 31st of December 2019.

The scheme was set up to help first time buyers receive a rebate of income tax which could be used as part of a deposit on the purchase of a new home.

In order to qualify for the scheme, the individual must be a first time buyer and is required to either enter into a contract with a qualifying contractor to acquire a qualifying residence or draw down the first tranche of a loan used to fund the building of a qualifying residence by the 31st of December 2019.

A qualifying residence is a new residence which will be occupied as the purchaser’s sole or main residence.  The price of the residence cannot exceed €500,000.  The purchaser must also take out a mortgage of at least 70% of the purchase price of the property.

Where the conditions are satisfied the purchaser will be entitled to a rebate of income tax equal to the lower of:

  • 5% of the purchase price
  • €20,000
  • The total income tax, including DIRT, paid by the purchaser in the 4 years immediately preceding the year of application.

If the purchaser receives approval in respect of the scheme the tax rebate will be paid to the builder. 

Beware though.  Revenue are entitled to clawback the rebate where the property is not the purchaser’s main residence for a period of 5 years. 

What Questions Do You Have?

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Image by Jan Vašek from Pixabay