Help to buy scheme

Overview

The Help to Buy (HTB) scheme is an incentive for first-time property purchasers. It will help you with the deposit you need to purchase or self-build a new house or apartment. You must purchase or self-build the property to live in as your home.

Where you meet the required conditions, you will receive a refund of:

Irish Income TaxandDeposit Interest Retention Tax (DIRT) you paid in Ireland.

The refund will be from the four tax years prior to when you make your application. The refund will not include any refunds you have already claimed.

 

What is a qualifying property?

To qualify for the Help to Buy (HTB) Scheme, the property you purchase or self-build must be:

your homeandnewly built, with the construction subject to Value Added Tax (VAT) in Ireland.

The property must never have been used, or have been suitable for 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 purchase or self-build the property as an investment, it does not qualify for HTB.

Mortgage

You must take out your mortgage on the property with a qualifying lender. You must use this loan for the purchasing or self-building of the property. The loan must be at least:

70% of the purchase valueor70% of the approved valuation.

This is known as the loan to value ratio.

Purchase value

The purchase value of a new build means the full Open Market Value (OMV) of the property. This is usually the price you purchased it for, unless you paid a reduced price for the property. The full OMV is the purchase value used for the purposes of HTB, in all cases. The purchase value of the property must be €500,000 or less to qualify for HTB.

Approved valuation

If you are self-building a property, you must submit the approved valuation of the property with your claim. The approved valuation is the valuation of the property approved by the lender at the time you took out the mortgage The approved valuation must be €500,000 or less to qualify for HTB.

Shared Equity Schemes

Funding received from the State as part of a shared-equity scheme does not form part of the loan-to-value ratio calculation. There is one exception to this where:

you are participating in the Local Authority Affordable Purchase Schemeandyou have entered into a contract to purchase a qualifying residence on or after 11 October 2023.

In this case the affordable dwelling contribution received from the Local Authority will be included as a loan when calculating the 70% loan-to-value ratio.

Example 

Mary is a first time buyer. On the 15 October 2023 she purchases a house for €300,000 under the Local Authority Affordable Purchase Scheme. She secures a mortgage for €180,000. She is also eligible for shared equity in the form of an affordable dwelling contribution of €45,000 from her Local Authority. The Local Authority takes a 15% equity stake in the property.

Total finance for the house

Source

€

Mortgage

180,000

Local Authority affordable dwelling contribution

45,000

Savings

75,000

Total

300,000

Mary purchased the property under the Local Authority Affordable Purchase scheme after the 11 October 2023. The affordable dwelling contribution will be included in the loan-to-value calculation as follows:

(€180,000 + €45,000)/€300,000 x 100 = 75%

As the loan-to-value is greater than 70%, Mary is eligible for the HTB scheme. If Mary signed her purchase contract before the 11 October 2023, the affordable dwelling contribution would not be included in the loan-to-value calculation.

Note

Shared equity finance availed of under the First Home Scheme is not taken into account in calculating the loan-to-value ratio.

Who can claim HTB?

To claim HTB, you must:

be a first-time purchaser at the time of the claimpurchase, or self-build, a qualifying property between 1 January 2017 and 31 December 2029live in the property as your main home for five years after you purchase or self-build itbe tax compliant and, where relevant, have tax clearance in place. For more details please see What do you need to do before you applyandtake out a mortgage on the property with a qualifying lender. The mortgage must be at least 70% of the:purchase value of the propertyorapproved valuation, in the case of a self-build.

Note

Certain shared-equity finance may form part of the loan-to-value ratio. This will depend on the shared-equity scheme you avail of. For more details, please see What is a qualifying property.

To qualify, you must not have previously purchased or built a house or apartment, either on your own or jointly with any other person. If you are purchasing or self-building the new property with other people, all of them must be first-time purchasers. If you have inherited, or have been gifted, a property, depending on the circumstances, it may not affect your eligibility.

If you are purchasing the property, you must have signed a contract to purchase that property on, or after, 1 January 2017. If you are self-building, you must have drawn down the first part of the mortgage on, or after, 1 January 2017.

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 ensure that your developer or contractor is approved.

If you are self-building, you do not need to use a Revenue approved contractor. However, you will require a solicitor (registered with Revenue as a ‘HTB approver’) to verify your HTB claim.