I propose to take Questions Nos. 288 and 298 together.
The Help to Buy (HTB) incentive, is a scheme to assist first-time purchasers with the deposit they need to buy or build a new house or apartment. The incentive gives a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous four years, subject to limits outlined in the legislation. Section 477C of the Taxes Consolidation Act outlines the definitions and conditions that apply to the Help to Buy scheme.
One such condition is that a qualifying first time buyer must take out a loan in an amount equal to at least 70% of either the purchase price of the property in the case of a purchased house, or the value of the property in the case of a self-build house. The valuation of a self-build is as approved by the lender as determined in accordance with the Central Bank’s macro prudential rules. These rules stipulate the valuation as being the site cost plus the cost of construction. I do not believe that it would be fair or equitable to allow for different eligibility criteria with regard to loan-to-value ratios in respect of self-build properties vis a vis that which applies to all other new build homes. As such, there are no plans to amend the scheme in this regard.
Another requirement of the HTB scheme is that the first-time buyer has entered into a “qualifying loan”. In summary, a qualifying loan means a loan which is:
a. is used by the first-time purchaser wholly and exclusively for
b. (i) the purchase of a qualifying residence, or (ii) the provision of a self-build qualifying residence (including the acquisition of land required for its construction)
c. is entered into solely between a first-time purchaser and a qualifying lender, (but does not exclude a loan to which a guarantor is party), and
d. is secured by a mortgage or a charge on the qualifying residence.
I am advised by Revenue, based on the details outlined in the case by Deputy Smyth involving a Credit Union loan, that case would not satisfy the qualifying loan definition and therefore it may not be included in the loan to value ratio calculation.
I am further advised by Revenue that, as the loan to value ratio for both cases outlined is less than 70 per cent, the applications do not meet the conditions required to qualify for HTB. Revenue does not have discretion to vary the statutory conditions for qualification for relief under the HTB scheme.