The help to buy scheme - what are the tips and traps?

The help to buy scheme provides for an income tax rebate for “first time purchasers”.

To qualify, the property must be a newly built principal private residence which is bought new or self-built. 

The mortgage must be at least:

• 70% of the purchase price, or 
• for self-builds, 70% of the valuation approved by the mortgage provider.

From 19.07.2016 to 31.12.2016 the maximum relief was the lower of:

• €20,000 (purchase value between €400,000 and €600,000), 
• income tax paid by the claimant for the 4 years immediately preceding the year of claim, or  
• 5% of the house price (or self-build valuation).

From 01.01.2017 to 31.12.2020, the maximum relief was the lower of:

• €20,000 (purchase value between €400,000 and €500,000 with no relief granted on any property over €500,000), 
• income tax paid by the claimant for the 4 years immediately preceding the year of claim, or  
• 5% of the house price (or self-build valuation).

For 2021 and 2022, the maximum relief is the lower of:

• € €30,000 (purchase value between €400,000 and €500,000 with no relief granted on any property over €500,000), 
• income tax paid by the claimant for the 4 years immediately preceding the year of claim, or  
• 10% of the house price (or self-build valuation).

Notes

TCA 1997 s 477C. 

Tax Checklists: p32.

Tips

The claim is made through MyAccount or ROS.

Traps

1. The loan to value (LTV) ratio for the house must be at least 70%. In an Appeal Case, an appellant with an LTV of 69.89% was unsuccessful: 01 TACD 2018.

2. Expires 31.12.2022.

3. Employees must have filed their Form 12 for each of the previous 4 years.
4. If you do not live in the house for 5 years following the conveyance or completion the relief is wholly or partly clawed back. The amount of the claw-back diminishes for each year in which you lived in it.

5. Cash buyers do not qualify for the relief and you can not avail of the relief if you have previously bought, built or inherited a property, either individually or jointly with another party.