As the Deputy will be aware, the purpose of the Help to Buy (HTB) incentive is to help first-time buyers fund their first home, whether purchased from a builder or self-built. The legislative provisions for HTB are set out in Section 477C Taxes Consolidation Act 1997. Those provisions include the following:
- the obligation on contractors that receive a payment in respect of a claimant to ‘treat the appropriate payment as a credit against the purchase price of the qualifying residence’ (section 16b);
- the conditions to ensure that eligibility for the HTB refund is maintained for 5 years (section 17);
- the obligation to repay a HTB payment to Revenue where a claimant or contractor (as appropriate) is unable to meet any of the HTB conditions, which include that the qualifying residence is to be purchased within 2 years (section 18); and
- that Revenue can raise an assessment on a claimant or contractor (as appropriate) where a HTB payment is not repaid to Revenue (section 20).
Consequently, there is an obligation on any qualifying contractor, in receipt of HTB payments to their bank account in respect of house purchases in the period from 1 January 2017 to 31 December 2019, to
1. provide a house for the HTB claimant within 2 years, and
2. give the HTB claimant credit for the value of the HTB payment received from Revenue as part of their deposit.
Regarding the safeguards in place to protect the Exchequer from contractors who fail to meet the conditions of the HTB incentive; In the first instance all qualifying contractors must hold a tax clearance certificate to certify that they are fully tax compliant, and they must also meet all of the requirements of Relevant Contracts Tax. In addition, if a qualifying contractor is unable to provide a house for the HTB claimant, then he, she or it is required to refund the HTB payment received to Revenue. If the payment is not refunded, Revenue can raise an assessment. If the assessment is unpaid, the amount of the refund and any interest thereon constitutes a charge on the contractor’s freehold or leasehold estate or interest in the land on which the qualifying residence was to be built and remains so until it is fully paid.
I am advised that Revenue provides a range of information about the operation of the HTB incentive on their website, including detailed applicant and contractor guides. Furthermore, Revenue has been involved in discussions and meetings with various stakeholders about the operational procedures for HTB, including the Construction Industry Federation and the Law Society. In these discussions, Revenue highlighted, in particular, the obligations on contractors to provide the first home for the HTB claimant within two years or that there would be a clawback of the HTB payments made.
I am further advised that, as part of its overall administration of the HTB incentive, Revenue is operating risk based compliance checks to ensure that the qualifying conditions of the scheme are met by qualifying contractors and claimants.
