The Help to Buy Scheme or “HTB” Scheme allows first-time buyers in Ireland to claim a tax rebate up to 10% of the value of a new home they are buying.
Updated – As part of the government’s July 2020 Stimulus package – the HTB limit of 5% or €20,000 was increased to 10% or €30,000. This increase was originally due to run until the end of 2020 but it was extended in Budget 2024 to continue to the end of 2025.
The Help to Buy tax rebate is available only to first-time buyers to help them purchase a new home in Ireland or to self-build a new home . ( A new home must be purchased from a “qualifying contractor” ) .
The scheme is aimed at people who might not be able to afford to put down a 10% deposit in line with Central Bank Mortgage Rules.
The Help to Buy scheme was due to finish at the end of 2021 but it was extended to run until the end of 2025
Help To Buy Details:
The government’s Help to Buy Scheme (HTB) currently enables eligible first-time buyers to get up to 10% of the purchase price of a new house or apartment back in the form of a tax rebate. You can also get it for once-off self-build homes.
The market value of the property must be €500,000 or less.
For a self-build – the approved valuation of your home must be €500,000 or less. The valuation is approved by your mortgage provider and is valued at the time the mortgage is entered into. It includes the cost of the site.
Derelict House Refurbishment
Revenue guidance states that first-time buyers may purchase a site containing a house which is derelict and that they plan to demolish, in whole or in part, to build a new house. First-time buyers intending to undertake such purchases should contact Revenue who will consider eligibility for HTB in such circumstances on a case-by-case basis.
Limited to Tax Paid in Last 4 Years
The maximum tax rebate available under Help to Buy is limited to the total income tax and DIRT paid in the previous four tax years.The amount is capped at €30k
If you have paid less than €30k income tax / DIRT in the past 4 years then the maximum rebate possible will be the total amount of tax you paid.
Examples of Maximum HTB Amounts
|Max Rebate (10%)
HTB Worked Example
Using Revised Figures effective from July 2021
A joint application .
Applicant 1 – Salary €47000 . Income tax paid in past 4 years = €25000
Applicant 2 Salary €33000. Income tax paid in the last 4 years = €12000
They have paid a total of €37000 Income Tax in the last 4 years and therefore will be eligible for the maximum €30000 Help to Buy.
House Price €400,000
Help to Buy amount €30,000
Mortgage: – based on 3.5 times the joint salary they could borrow €280,000.
This meets the Help to Buy rule on minimum Mortgage LTV allowed (70%) (70% of €400k = €280,000)
This means a deposit of €120k will be required
The Help to Buy contribution of €30k leaves them needing an extra €90k for the deposit.
Note : – It might be possible to get an exemption on the salary limit from their mortgage lender. In that case, a mortgage of €320,000 could be possible. (4 times earnings).
If the buyers did get a €320k mortgage they would need to contribute €50k for the deposit on top of the €30k from Help to Buy.
Cashback Mortgages from Banks :
In the above example , if the house buyers went for one of the 2% cashback mortgages they would also get €6400 cashback from the lender. That would come in handy for buying furniture etc.
If first-time buyers using Help To Buy also manage to get one of the cashback mortgages – such as with Bank of Ireland , they could end up with as much as 12% total cashback.
See our lists of the Lowest Mortgage Rates Here
See How much you Can Borrow
Sometimes a good mortgage broker can assist you in getting a bigger mortgage – Money Sherpa can talk to you about your options.
You can book a free callback from their mortgage team to help you find the best deal and make the paperwork painless. There is NO obligation to use them and they don’t charge fees.
Applications for Help to Buy Scheme
Important : Before making an application for the Help to Buy Scheme, you must first complete Online Forms 12 (if a PAYE taxpayer) OR Forms 11 (if self-assessed), in respect of each of the four tax years and you must pay any outstanding taxes due.
Applicants will also need to register for Revenue’s MyEnquiries service.
There are 2 stages to the HTB Application :
Stage 1 is to work out the maximum relief available to you under the scheme based on the income tax payments you made in the relevant years. House buyers can apply to Revenue for the HTB scheme before choosing a house or applying for a mortgage. Once you know the maximum HTB amount possible – you can then arrange a mortgage or sign a contract with a Qualifying Contractor.
When mortgages and contracts are signed, you must complete Stage 2 of the Help to Buy Claim . At this stage Revenue will calculate the exact rebate based on the purchase price.
All the HTB payments by Revenue will be paid directly to the builder/developer as part of the deposit. The builder/developer must have registered with Revenue as a registered contractor under the Help to Buy Scheme .
Only properties built by a registered contractor will be eligible.
In the case of a self build – the payment will be made direct to the bank providing the mortgage.
To qualify for HTB , applicants must take out a mortgage of at least 70% of the purchase price, or in the case of a self-build, at least 70% of the valuation approved by the mortgage provider. This is to avoid helping people who have a deposit big enough to cover 20% or more of the house price.
First Time Buyer – definition . Revenue say that…. “The first-time buyer must not have either individually or jointly with any other person (directly or indirectly), previously purchased, or built a property.”
That means owning an inherited property will not exclude people from this scheme.
Clawback of Help to Buy
The property purchased with Help to Buy must be occupied by the buyer, or at least one of the buyers, for a period of five years from the date the property is habitable. Otherwise some or all of the rebate will have to be repaid. See Below …
Leave or sell within 1 year – 100% of rebate to be repaid.
Leave or sell within 2 years – 80% of rebate to be repaid.
Leave or sell within 3 years – 60% of rebate to be repaid.
Leave or sell within 4 years – 40% of rebate to be repaid.
Leave or sell within 5 years – 20% of rebate to be repaid.
First Time Buyers Grant
The HTB scheme is sometimes called the First Time Buyers Grant .
There was a “First Time Buyers Grant” in operation from 1977 to 2002. When it was finally abolished it was worth €3,610 . The Housing Minister at the time said the grant “returned little benefit to consumers” and had “simply been absorbed in the increased profits of builders“.
First Time Buyers in Ireland can also apply for low-interest rate mortgages from local authorities. Read more here about these Rebuilding Ireland Home Loans.
It seems that it is possible to use both the Help to Buy Scheme and the Rebuilding Ireland Home Loan. We have not seen anything to say otherwise.