Dáil Éireann Debate, Tuesday - 22 June 2021
221. Deputy Paul McAuliffe asked the Minister for Finance if he is considering amending the help-to-buy scheme to include the best four of the past five years of PAYE income given the impact of Covid-19 and the large number of persons who received the pandemic unemployment payment thus paying less tax than in previous years; and if he will make a statement on the matter. [33017/21]
View answerThe Help to Buy (HTB) incentive is a scheme to assist first-time purchasers with a deposit they need to buy or build a new house or apartment. The incentive gives a refund on Income Tax and Deposit Interest Retention Tax (DIRT) paid in the State over the previous four years, subject to limits outlined in the legislation.
Section 477C Taxes Consolidation Act (TCA) 1997 outlines the definitions and conditions that apply to the HTB scheme.
HTB claimants may select all or any of the previous four tax years for the purposes of calculating the HTB refund. For the purposes of the HTB scheme, a tax year is considered January to December of the relevant year. Where an applicant has only paid Income Tax for part of a tax year (e.g. if only worked August to December), the applicant may still choose that year as a relevant tax year for the purposes of the HTB scheme, and any Income Tax / DIRT paid during that year will be included in the HTB refund calculations, subject to the limits outlined in legislation.
The Revenue Tax and Duty Manual Part 15-01-46, available at www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-46.pdf, outlines further guidance on the conditions and operation of the Help to Buy scheme including details of how the payment is calculated.
The refund period covering the previous four tax years as set out in the HTB legislation is linked to the general time limits on repayments of tax that are contained in section 865 TCA 1997. This section provides that claims for repayment of tax will not be allowed unless the claim is made within four years of the end of the period to which the claim relates.
However, the Deputy may wish to be aware that, as regards the negative impact of Covid-19 related restrictions on employment and the ability to qualify for HTB, Revenue have advised that where an underpayment of tax arises for the year 2020 as a result of amounts received under the TWSS or PUP, Revenue 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.
The future of the HTB scheme beyond its current sunset date of 31 December 2021 is a matter that will fall to be considered in the context of Budget 2022 and the subsequent Finance Bill.
