Lisa Lokasto

The Help to Buy (HTB) scheme remains a key tax incentive for first time buyers in Ireland. With Irelands housing market being as it is, lord knows they need all the help they can get.

This scheme has been extended and refined multiple times. This post outlines the current rules, recent changes and key considerations.

What is the help to buy scheme:

The HTB scheme is a tax refund based incentive designed to help first time buyers getting the deposit together to purchase a new residential property or self build a PPR (principal private residence)

So if you’re buying a  

• Second-hand house
• Existing apartment
• Refurbished/renovated properties

No HTB is available. Revenue have confirmed renovation or refurbishment of old houses does not qualify. It must be a new dwelling (never used or suitable as a home before)

The property must also be not more €500k and it must be by a qualifying contractor, which is a builder/developer who is registered with Revenue to participate in scheme.

You must live in the property as your main residence for five years from the date of occupation.

From a contracting point of view getting registered with Revenue involves

• Being VAT registered
• RCT registered with a valid RCT rate (0% or 20%)
• Be tax compliant (so have a tax clearance cert)
• Register with Revenue specifically for HTB, as in it’s not automatic once you meet the above criteria.

The relief operates as a repayment of Income Tax and DIRT paid in Ireland over the previous four tax years so it’s basically a refund of taxes already paid (subject to certain caps). This is only helpful if you’ve been paying taxes in Ireland for the past few years, if you’ve come home from abroad recently, maybe less so.

This scheme is extended to December 2029, it’s administered fully through Revenue’s online systems (myAccount/ROS) and it kicks in at deposit stage.

Current Relief Limits & Operation

Relief is the lower of:

• €30,000
• 10% of the purchase price (or approved valuation for self-builds)
• Income Tax + DIRT paid in the previous four years

So if you’ve paid roughly 20k tax a year income tax and DIRT (not USC or PRSI), and you’ve been working in Ireland and paying that level of tax for the past 4 years then you’ll have paid 80k in income tax. If you’re buying a house in or about the €450k mark, the deposit is €45k. You could get a rebate of 30k, potentially, meaning you have to fund €15k deposit, plus costs, moving and furnishings.

The refund will not include any refunds of taxes already claimed or offset elsewhere.  

In most cases (new builds), HTB is paid directly to the contractor and it forms part of your deposit.

You still need to secure a mortgage for the balance and HTB doesn’t replace mortgage rules

• Central Bank lending rules
• Loan-to-income limits
• Repayment capacity

Revenue requires a qualifying loan, a qualifying lender, and a minimum 70% loan-to-value ratio for HTB. This sits alongside, rather than overrides, normal mortgage underwriting

You’re still looking at legal and professional costs of in or about €3k–€5k, snagging, valuation, survey €500–€1,500 and furnishing/moving costs easily €5k–€15k and upwards. Real money!

Self Build Nuances

Self-builds are subject to broadly all the same criteria, with one or two key nuances.

The mortgage must be used wholly for the build (and site if applicable), and it must be secured on the property. In many cases the site will have been gifted by family. The 70% loan-to-value requirement can be a problem here, because self-builds with too much equity (e.g. a gifted site) may fall below the threshold and therefore not qualify for HTB. You must also be tax compliant and fully up to date with your taxes.

The key difference is timing. Instead of signing a purchase contract (which triggers the deposit stage in a normal purchase), HTB for a self-build kicks in when you draw down the first tranche of your mortgage within the qualifying period. The payment is not made to a qualifying contractor either, as there isn’t one in this scenario (it goes to the lender).

Self-builds must generally be completed within 2 years, otherwise HTB can be clawed back.

For self-builds, Revenue requires a registered solicitor to verify the claim, including confirming the mortgage drawdown, valuation and build details.

Your bank, however, is a different story. While Revenue doesn’t require a builder, lenders typically will. In practice, they will require:

• An approved builder.
• A stage payment structure
• Architect/engineer certification

They generally won’t release funds without a stage payment request backed by an architect’s or engineer’s certificate.

bottom line

HTB works well when it’s done right. Just make sure you’ve checked the details before you commit.

Lisa