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Help-to Buy-Scheme Explained

First time buyers have had it tough over recent years – there’s no denying it.

Saving for a deposit while paying rent, and watching property prices begin to move upwards, hasn’t made for a comfortable time for those seeking to make the first step on the property ladder.

In the October Budget, the government introduced the help-to-buy scheme, devised to boost housing supply and re-energise the property market.

The scheme – set against a backdrop of rising rents, lack of affordable housing, and low levels of new development – was established to give first time buyers a much needed leg up.

When it was launched Sherry FitzGerald Group chief Economist, Marian Finnegan, welcomed the measure.

Now new Revenue figures show that in the first month of 2017, there were almost 2,000 applications with more than 430 applications deemed successful.

So how does it work?
The scheme allows first-time buyers to access a refund of income tax and Deposit Interest Retention Tax (DIRT) paid over the previous four tax years in order to buy or self-build a new home.

In total applicants can get back 5% of the purchase price. The scheme requires that the buyer must live in the apartment or house as their home and the rebate is capped at €20,000.

Who can claim?
In short, you must be a first time buyer – if it’s a joint application both applicants need to comply with this requirement – who purchases or builds a home between the dates of 19 July, 2016 and 31 December, 2019.

If you have built or bought previously you will not be eligible and furthermore you must be tax compliant to qualify for the help to buy incentive.

Purchasers must take out a mortgage with a qualifying lender, and the loan to value ratio must be greater than 70%.

What properties does it cover?
To be eligible the property or build must be the applicant’s intended home – investment properties are not covered by the scheme.

The rebate applies to new homes only and this includes self builds.

Properties bought or built between July 19, 2016 and Dec 31, 2016 are eligible for rebates on purchases up to €600,000.

On homes purchased from January 1 of this year, the rebate applies only to houses up to €500,000.

The property must be occupied by the first-time buyer, or at least one of the buyers in cases of joint/multiple purchase. They must live in the property for at least five years or the rebate, or at least part of it, will have to be repaid

How to apply
Applications can be made online – PAYE employees can apply on Revenue’s MyAccount .
Self Assessed taxpayers can apply through ROS

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