Help to Buy (HTB) incentive

Overview

The Help to Buy (HTB) incentive is a scheme for first-time property buyers. It will help you with the deposit you need to buy or build a new house or apartment. You must buy or build the property to live in as your home. The incentive will give you a refund of Income Tax and Deposit Interest Retention Tax (DIRT) that you paid in Ireland over the previous four years.

Who can claim the Help to Buy (HTB) incentive?

To claim HTB, you must:

  • be a first-time buyer
  • buy or build a new property between 19 July 2016 and 31 December 2019
  • live in the property as your main home for five years after you buy or build it
  • be tax compliant, if you are self assessed you must also have tax clearance.

To qualify, you must not have previously bought or built a house or apartment, either on your own or jointly with any other person. If you are buying or building the new property with other people, they must also be first-time buyers. If you have inherited or been gifted a property it will not affect your eligibility. If you are buying the property, you must have signed a contract to buy that property on or after 19 July 2016. If you are self-building, you must have drawn down the first part of the mortgage on or after that date. Approved developers and contractors The contractor you are purchasing your home from must be approved by Revenue. You can check the list of approved developers and contractors to make sure that your developer or contractor is approved.

What type of property qualifies?

To qualify for HTB, the property that you build or buy must be:

  • your home
  • newly built with the construction subject to Value Added Tax (VAT) in Ireland. The property must never have been used, or have been suitable to use, as a residential home. If the property was non-residential, but has been converted for residential use, it may qualify for HTB.

If you buy or build the property as an investment, it does not qualify for HTB.

Purchase value

The purchase value of a new build means the price that you bought it for. For self-built property, the purchase value is the approved valuation by the lender at the time that you took out the mortgage. If you bought the property between 19 July 2016 and 31 December 2016, the purchase price must be €600,000 or less. If you bought it after 1 January 2017, it must be €500,000 or less. Mortgage You must take out your mortgage on the property with a qualifying lender. This loan must be used only for buying or building the property. The loan must be at least 70% of the purchase value of the property. This is known as the loan to value ratio. You are allowed to have a guarantor on the loan.

How much can you claim?

The amount that you can claim is the lesser of:

  • €20,000
  • 5% of the purchase price of a new home. For self-builds this is 5% of the completion value of the property
  • the amount of Income Tax and Deposit Interest Retention Tax (DIRT) you have paid in the four years before your purchase or self-build. The maximum payment is €20,000 per property. This cap applies regardless of how many people enter into a contract to buy a house. Universal Social Charge (USC) or Pay Related Social Insurance (PRSI) are not taken into account when calculating how much you can claim.

How will the refund be paid?

If you bought or built the property between 19 July 2016 and 31 December 2016, the refund will be paid directly to you. If you buy a new build after 1 January 2017, the refund will be paid to the contractor. If you self-build the property after 1 January 2017, the refund will be paid to a bank account you hold with your loan provider.

What do you need to do before you apply?

Before you apply, you must be registered for either:

  • myAccount, if you are an employee and pay tax through PAYE
  • Revenue’s Online Service (ROS), if you are self-employed. If you pay tax through PAYE Before you apply for HTB, you must submit a Form 12 for each year you wish to apply for a payment and pay any outstanding tax due. Use myAccount to submit a Form 12 for the years from 2015. Online Form 12s are prepopulated with your pay and tax details. If you need to submit a Form 12 for 2014, you can download the form and submit on paper.

When you have completed this form, you can scan it and then upload it in MyEnquiries. To do this, you should:

  • click ‘Add new enquiry’
  • select ‘Help-To-Buy scheme’ from the dropdown options available under ‘My Enquiry relates to’
  • select ‘Form 12 (2014)’ from the dropdown options available under ‘And more specifically’ ● attach the scanned pages of your Form 12
  • submit your enquiry. If you are self-employed If you are self-assessed, you must be fully tax compliant and have tax clearance. You must have filed your income tax returns and paid all the tax that you owe for any years where you were self-employed. Use Revenue Online Service (ROS) to submit your Form 11. Four year rule You may have signed your contract to buy a new build or drew down the first part of your mortgage for a self build between 1 January and 31 March 2018. If so, you may select either the:
  • year of purchase to be the actual year you bought or built your home
  • previous year provided you make your application before 31 May 2018. This will allow you to select the four year period which is of most benefit to you. For example, if your contract or draw-down date is 2 February 2018, you may choose whether that took place in either 2017 or 2018. If you choose 2017, this will allow you to use your Income Tax and DIRT for the four years from 2013 to 2016. If you choose 2018, you can use the years from 2014 to 2017. How do you apply for Help to Buy (HTB)? Use myAccount or Revenue Online Service (ROS) to apply for HTB online.

There are two stages to the online process:

  • the application stage
  • the claim stage.

Application Stage

You can apply as an individual, or part of a group that is buying or building a property. You must complete a declaration and select the years you want to use for a refund. If you are tax compliant, your application will be approved. You will be provided with an application number and a summary of the maximum amount you can claim. You will also be given a 6 digit access code separately through MyEnquiries. Keep a safe note of both of these codes as you will need to provide them to your lender. If you are buying your home you will also need these codes for your qualifying contractor. If you are self-building you will need these codes for your solicitor. Your contractor or solicitor will require this information to verify what you have submitted. If you make a HTB application but have not yet made a claim, your application will expire on 31 December. You can then re-apply and make a new HTB application.

Claim Stage

You can make your claim once you have either:

  • signed the contract for your home
  • drawn down the first part of the mortgage if you are self building. Login to HTB through myAccount or Revenue Online Service (ROS) and complete the following steps below.

Step 1

Upload evidence of your mortgage and the following information about your application:

  • if you are buying a home: a copy of the signed contract
  • if you are building a home: ◦ proof of the drawdown of the first part of the mortgage ◦ a copy of the valuation report from your lender. Step 2 You will be asked to confirm details about the:
    1. property
    2. purchase price
  • date of completion
  1. mortgage
  2. amount of deposit already paid.

If you are applying with other people you will also need to confirm the portion of the refund to be refunded to each person. If you are self-building, you will need to provide the BIC and IBAN of the loan bank account. Once you have submitted your claim you will be provided with a claim reference. Please ensure that you have carefully checked all the information you input before you sign and submit the claim.

If any of the information you have provided is incorrect, you must:

  • cancel your claim
  • submit a new claim with the correct information This must be done before you continue to step 3.

Step 3

Once you have submitted your claim you should advise your developer or contractor (or solicitor if you are self-building). Provide them with your claim reference (issued to you after step 2) and access code (issued to you when you submitted your application).

Before you receive any refund, the information you have provided will need to be verified by the:

  • developer or contractor, in the case of a new build
  • solicitor acting on your behalf, in the case of a self-build.

The refund that you finally receive is limited to 5% of the purchase price of the house. This may mean that it is different to the maximum relief amount that you were given at application stage. Information for applicants, lending institutions, solicitors and contractors Applicants There are three types of applicants who can apply for the Help to Buy (HTB) incentive:

  • retrospective applicants
  • first-time purchaser applicants
  • first-time self-build applicants.

Lending institutions Lenders can confirm the maximum relief available to a HTB applicant using their application code and access number. Applicants should give these details to their lender. The HTB refund may change once the purchase price of the property is confirmed.

Solicitors

If a HTB applicant is self-building a house, his or her solicitor must verify the claim. Solicitors must first apply to Revenue to be a registered solicitor for the HTB incentive. To be a registered solicitor for verifying HTB claims for self-builds, solicitors must submit a completed HTB2 form through MyEnquiries in ROS. This should be submitted using the MyEnquiries category ‘Help to Buy Scheme – Solicitor Approval’. See the Summary Guide for Solicitors for further information on this process.

Contractors

Contractors who wish to operate the HTB incentive need to provide Revenue with:

  • evidence that they are tax compliant. This means that they must have a Relevant Contracts Tax (RCT) rate of zero or 20%.
  • their Value-added Tax (VAT) registration details
  • evidence that they have an up-to-date Tax Clearance Certificate
  • details of the qualifying properties which they offer, or intend to offer, for sale during the time that the incentive is available
  • details of the planning permission for the properties which they intend to build during the time that the incentive is available
  • details of the freehold, leasehold estate or interest in the land on which the qualifying properties are built or to be built
  • any other relevant information that Revenue need to assess their application.

To be registered as a ‘qualifying contractor’ for HTB, contractors must submit a completed HTB1 form through MyEnquiries in ROS. This should be submitted using the MyEnquiries category ‘Help To Buy Scheme – Contractor Approval’.

When registering, contractors should:

  1. click ‘Add new enquiry’
  2. select ‘Help-To-Buy scheme’ from the dropdown options available under ‘My Enquiry relates to’
  3. select ‘Contractor approval’ from the dropdown options available under ‘And more specifically’
  4. attach the necessary information and supporting documentation, as listed above. They may attach up to 10 files, with each attachment up to 10MB in file size.
  5. confirm that they agree to allow Revenue to publish their details as ‘qualifying contractors’
  6. submit the enquiry. – Click ‘Add new enquiry’ and select ‘Help-To-Buy scheme’ and ‘Contractor approval’ from the dropdown options available under ‘My Enquiry relates to’ and ‘And more specifically’.

Can Revenue claw back a refund?

  • Revenue can claw back refunds if:
  • you were not entitled to the refund
  • you do not live in the property for a minimum of five years
  • you did not finish the process to buy the property
  • you did not finish building the property.

Revenue can claw back refunds from the contractor if:

  • the property is not bought by you within two years from when the refund was made to the contractor
  • Revenue has reasonable grounds to believe that the property will not be bought by you within that two-year period. There is some flexibility around the two-year period. This can apply if Revenue is satisfied that the property is either: [PDF]
  • almost complete at the end of the two years
  • likely to be completed within a reasonable time period. Once the residence is built and bought by you, you are solely responsible for meeting the conditions for the HTB refund. The developer is no longer responsible after this point.

Warning – This is a variable rate loan: The payment rates on this mortgage may be adjusted from time to time.

Warning – Your home is at risk if you do not keep up repayments on a Mortgage or any other loan secured on it
Warning – If you do not meet the repayments on your loan, your account will go into arrears. This may affect your credit rating, which may limit your ability to access credit in the future.