Help To Buy Initiative – Could you score the financial assistance you need to buy a new home?
Saving money to purchase a house can be some of the most stressful times in many people’s lives, with housing prices on the rise along with the demand on housing in Ireland it has never been more difficult to purchase your first home.
Thankfully it’s not all doom and gloom and there is some really great initiatives by our government to help First Time Buyers.
The Help-To-Buy Initiative which aims to help buyers acquire the deposit to purchase their home came into effect in January 2017, and has successfully been in operation ever since.
Currently in Ireland mortgage lenders require a minimum of 10% deposit of the house value to qualify for a mortgage. Similarly, mortgages are available to purchasers up to 90% of the entire house value.
The Scheme offers to give you 5% of your 10% mortgage allowing you to purchase your home with a 5% deposit.
With the scheme there are some requirements and conditions, here is the fine print;
- Borrowers can claim a maximum of 5% of the value of the property or €20,000 – whichever is lower.
- Under the scheme, first-time buyers can claim a tax rebate of up to €20,000 for the purchase price of a new-build or self-build house or apartment.
- The rebate is only available on properties valued at €500,000 or less.
- Any first-time buyer of a newly built home can apply for a tax refund under the Help-to-Buy incentive. However to qualify as a first-time buyer under the scheme, you must not have previously purchased, built or inherited a home yourself or with any other person.
- If you’re a joint buyer, and one applicant is a first-time buyer and another applicant is not, you cannot apply for the grant.
- Only newly built homes and self-builds are included in the scheme. Conversions and restorations of old or derelict homes do not qualify, but conversion of a non-domestic building for residential use may qualify.
NB: If you purchase a property for €400,000, you can claim the maximum rebate of €20,000. But if you buy a house for €500,000, the relief will be capped at €20,000.
If I purchase a house today I can claim up to 20,000?
In short yes, but it is a tax rebate and not a free money scheme which sometimes gets confusing. In order to claim you must have paid the equivalent amount of tax over the course of 4 years previous to your purchase. If you are purchasing on your own or as a couple for example the same rules apply.
Note: The USC and PRSI are not taken into account when calculating how much you can claim. However, most people who have been living and working full-time in Ireland over the past four years will likely have paid more than enough income tax to fully qualify for the scheme.
How do I apply?
You can apply online through Revenue’s MyAccount service. And as long as you are tax compliant, Revenue will provide you with a summary of the maximum refund available to you within around five working days.
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