Wednesday, 20 January 2021

Questions (137)

Aengus Ó Snodaigh


137. Deputy Aengus Ó Snodaigh asked the Minister for Finance if there has been a decision as to whether those who are seeking to avail of the help-to-buy scheme and who have been on the temporary wage subsidy scheme will need to comply fully with the requirement to have all tax liabilities for 2020 met, given the circumstances that applied in 2020; if all previous tax liabilities have been met; if an outstanding tax liability can be deducted from the tax rebate received using the help-to-buy scheme or in the case of a couple with a tax liability for 2020 of €3,000, for example, if they would have to have it paid first before qualifying; and if he will make a statement on the matter. [2280/21]

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Written answers (Question to Finance)

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 Taxes Consolidation Act 1997 outlines the definitions and conditions that apply to the HTB scheme. A claimant under the scheme must make an application confirming he or she meets various conditions specified in the section, including that he or she is a first-time purchaser and that he or she has completed a tax return form and paid any outstanding balance for each of the four tax years prior to making the application.

In relation to the tax due (if any) on amounts received under the Temporary Wage Subsidy Scheme (TWSS) or Pandemic Unemployment Payment (PUP), employees will be given the opportunity to fully or partially pay any income tax liability through the Payments/Repayments facility in myAccount. Otherwise, Revenue will collect the liability, interest free, by reducing the employees tax credits over 4 years to minimise any hardship. The reduction of tax credits will start in January 2022.

Where an underpayment of tax arises for the year 2020 as a result of amounts received under the TWSS or PUP, Revenue advise me that they will allow a claim for HTB relief for the amount of income tax paid for 2020 and will not require the outstanding tax liability to be paid in advance where the underpayment of tax is due to be collected from 2022 by reducing the claimant’s tax credits. This will only apply where all other conditions of the HTB scheme are satisfied.