How the Help to Buy Scheme Works in Ireland and Who Qualifies

Buying your first home is exciting, but let's be honest, it can also feel like stepping into a maze of paperwork, numbers, and decisions. That's where the Help to Buy Scheme in Ireland comes in. Made specifically for first-time buyers, it aims to take some of the financial pressure off by helping you pull together a deposit for a newly built home or even one you're building yourself.

This scheme can indeed serve as a lifeline.

Here's how it works: the scheme offers a tax refund on the income tax and Universal Social Charge (USC) you've paid over the last four years. This refund can go up to €30,000, or 10% of the property's value, whichever is smaller.

Whether you've been saving for years or you're just starting to crunch the numbers, that kind of boost can make all the difference.

It's fair to say that navigating the home-buying process can feel overwhelming at times. But with initiatives like this, at least one piece of the puzzle gets a little easier to manage.

How the Help to Buy Scheme Works

The Help to Buy (HTB) Scheme gives first-time buyers a financial boost toward purchasing or building their first home.

Here’s how it works:

• Maximum Refund: You can claim back up to €30,000, 10% of the property's price, or the total amount of tax paid in the eligible period, whichever is lower.
• Eligible Properties: The scheme applies to newly built homes or self-built properties with a market value of €500,000 or less. Importantly, the property must be brand-new and not previously lived in.

There are a few essential eligibility requirements you’ll need to meet. Applicants must be fully tax compliant, meaning your Income Tax returns for the past four years must be submitted, and any outstanding taxes must be paid.

The application process itself is straightforward enough, but having everything in order beforehand will make things simpler. You’ll need to register with Revenue’s online system, upload the required documentation, and have your claim verified by an approved contractor or solicitor.

Once approved, the refund is paid differently depending on the type of property:

• For purchases, the money is sent directly to the contractor.
• For self-builds, the refund is deposited into the account of your loan provider.

One condition to be aware of is the residency requirement. You must live in the property as your main home for at least five years after the purchase.

If you move out early, there’s a chance you’ll need to repay part of the relief. It’s a small trade-off, though, for what could be a life-changing step toward homeownership.

Eligibility Criteria for the Help to Buy Scheme

To qualify for the Help to Buy Scheme, there are a few important boxes to tick. Let's start with the basics:

• First-Time Buyer: This scheme is exclusively for first-time buyers. If you've ever purchased, built, or even partially owned a residential property, whether alone or with someone else, you won't be eligible.
• Residency Requirement: The property must be your primary residence. This isn't for holiday homes or properties you plan to rent out.
• Tax Compliance: Applicants must be fully tax-compliant. That means making sure you've filed and paid all your taxes for the four years leading up to the application.

Next, let’s talk about the property itself:

• New Builds Only: The property must be brand new and never lived in. Self-builds also qualify, but second-hand homes don't.
• Price Cap: The property's value can't exceed €500,000. This ensures the scheme focuses on more affordable housing.
• Approved Developers: If you're buying, the builder or developer must be approved by Revenue.

When it comes to finances, there are a few key requirements to keep in mind:

• Mortgage: Your mortgage broker will be able to explain exactly how the scheme will impact you specifically, and how best to tailor the mortgage options available. At Lenny Financial, we've assisted on hundreds of mortgage applications which have included the help to buy scheme since it was first introduced.
• No Investments: The property must be for personal use. Investment properties are a no-go.

It’s worth noting that this scheme isn’t designed for everyone. It’s carefully structured to help first-time buyers purchasing homes to actually live in, not investors or those looking for second properties.

While the scheme is not perfect, it’s all about ensuring the scheme supports those who truly need it.

And if the process feels overwhelming? Don’t stress. At Lenny Financial, we’re here to guide you every step of the way.

Steps to Apply for the Help to Buy Scheme

To recap, the Help to Buy Scheme helps first-time buyers with the often-daunting task of pulling together a deposit. By offering a refund on income tax paid over the past four years, it provides up to €30,000 or 10% of the property's value, whichever is lower.

The steps start with registering on the Revenue platform and making sure your taxes are in order. After that, you’ll submit your claim and provide the necessary details. Once the paperwork is verified, the refund is sent directly to the builder or into your mortgage account, depending on whether you’re purchasing or building.

And that’s it. There are definitely a few steps to get right, but the savings can be game-changing.

The Help to Buy Scheme serves both as valuable financial support and as a means of giving first-time buyers a fighting chance in today's very challenging housing market. And while there are some hoops to jump through, the end result can be well worth it.

If you've got questions, or just need a bit of guidance, Lenny Financial is here to walk you through every step of the way. Owning your first home might be closer than you think.