The Help to Buy incentive is a program from the Irish Government that provides relief to first time buyers of a new home or apartment. The amount of relief granted through this incentive was recently increased due to economic pressures brought on by the Covid 19 pandemic. In the July 2020 Jobs stimulus package, the Government increased the amount of relief available temporarily through 31 December 2020. With the passing of Budget 2021, this increased relief has been extended to 31 December 2021. The incentive gives a refund of income tax and Deposit Interest Retention tax (DIRT) paid in Ireland over the previous 4 years to qualifying first time buyers.
Help to Buy only applies to properties worth less than €500,000, and the home or apartment must be new or self built. To qualify for Help to Buy, you must be a first time buyer who either buys or self-builds a new residential property between 19 July 2016 and 31 December 2021. However, the Help to Buy scheme does not apply to rental or investment properties. The scheme is limited to properties that the buyer will use as their primary residence only. For your property to qualify, you must use your new property as your main home for a minimum of 5 years, and you must be tax compliant during this time, as well as the 4 years prior to your claim. It is also important to note that, if you qualify, you only will be receiving a refund on your income and DIRT taxes. You cannot claim relief on your Pay related Social Insurance (PRSI) or Universal Social Charge (USC). If you are buying your property in cash, it does not qualify, but if you have been gifted or inherited a property, this will not affect your eligibility.
Your loan to value ratio, or LTV, must be at least 70% to qualify. In addition, the contractor or developer you buy your home from must be approved by Revenue. If you are buying your home with a joint buyer, they must also be a first time buyer, or you will not qualify.
If approved, your relief amount will be the lowest amount out of these three:
- 10% of the amount of the purchase price of the home, or 10% of the amount of the valuation of the self build
- Your total amount of income taxes and DIRT taxes paid over the 4 years prior to your application
How you will apply depends on the type of taxes you pay. If you are a PAYE employee, you should apply through Revenue’s myAccount service. If you are a contractor or self employed, you should apply for the incentive using Revenue’s Online Service (ROS).