First Time Buyers Help to Buy (HTB) Scheme
At last, some guidance as to how one of our lenders is going to deal with the “Help to Buy Scheme” in terms of the deposit needed for first time buyers.
A little common sense has eventually prevailed. We would presume that all lenders will follow suit but most have not confirmed this yet.
First time buyers who qualify for the schemen can factor the tax rebate into their deposit requirements. This will ease the burden a good bit. The big issue is that the Incentive is only available on new builds.
- Designed to assist First Time Buyers with obtaining deposit required to purchase a new property to live in as their home.
- It is a refund of income tax paid over the previous 4 tax years.
- It is only available if all parties to the purchase are First Time Buyers .
- LTV must be greater than 70%.
- Purchase price must be no greater than €500k.
- Refund is 5% of the purchase price to a maximum of €20k.
- Building Contractor for purchases must be registered on the Revenue website as eligible
Who is Eligible
- First Time Buyers must not have individually or jointly with any other person previously built or owned a property.
- There are 3 types of customers;
1. Those who have closed between 19/07/2016-31/12/2016
2. Purchasing from a registered contractor post 01/01/2017
3. Individuals who are First Time Buyers starting a Self-Build
- All tax affairs must be up to date, any outstanding tax liability will be deducted from the eligible amount.
- Property must be occupied by the applicant for 5 years post completion
How to apply & what happens next
- First Time Buyers apply through the Revenue website either using PAYE or ROS access.
- Applicant eligibility will be checked based on tax paid over the last 4 years and any outstanding tax liability.
- After the application has been submitted the Revenue will provide confirmation number and access number for the applicant.
- The applicants will be able to print off a confirmation of the amount they are eligible for based on purchase details provided.
- Grant will be paid to the property contractor once all final contracts have been signed.
Impact on Mortgage Applications
- The regulations only impact First Time Buyer customers purchasing a new build property going forward. Retrospective cases completed in 2016 should be queried with the Revenue office.
- A portion of the balance of funds may now be funded by the Help to Buy grant.
- Proof of eligibility can be provided by the customer by way of print out from the Revenue web site, to be provided at application stage.
- Grant is payable directly to the contractor and as such on closing confirmation will be needed from the customer’s solicitor that the grant has indeed been paid.
All info available from http://www.revenue.ie/en/tax/it/reliefs/htb/index.html
Give us a call. We are happy to answer any questons you may have. We can also assess your ability to get a mortgage and how much you can borrow.