Dáil Éireann Debate, Wednesday - 17 November 2021
70. Deputy Carol Nolan asked the Minister for Finance if a couple who are first-time buyers who recently bought an unfinished house, which was never inhabited and which was built in 2009, in an unliveable condition at the time of purchase will qualify for the help-to-buy scheme given that the registered builder of the house is not in the help-to-buy scheme; and if he will make a statement on the matter. [56368/21]
View answerThe 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 (TCA) 1997 outlines the definitions and conditions that apply to the HTB scheme.
I am advised by Revenue as follows:
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, that he or she has completed a tax return form and is tax compliant for each of the tax years for which a claim is being made. Also, the new property must be occupied as the sole or main residence of a first-time purchaser. First-time purchasers who intend to purchase a new property should also ensure their contractor is a Revenue approved qualifying contractor for the purposes of Help to Buy.
S. 477C of the Taxes Consolidation Act 1997 provides that the property must be a new building which was not, at any time, used or suitable for use as a dwelling. In order to determine if the property satisfies the definition of a "qualifying residence", full details of the property would need to be provided. The Revenue Tax and Duty Manual Part 15-01-46 outlines further guidance on what would be considered a "new" house.
As part of the HTB process, "qualifying contractors" are involved in the claim stage of the process where the applicant has purchased a house or apartment. They are required to verify information provided by the applicant in the HTB process. Where the conditions of the HTB are satisfied and a HTB refund is available, the HTB refund is paid to the qualifying contractor to be offset against the purchase price of the property.
For a contractor to become part of the HTB process, they must first apply to Revenue to register as a "qualifying contractor". In order to become a "qualifying contractor" there are certain requirements that need to be satisfied as outlined in section 477C(2) TCA e.g. the contractor must be tax compliant and either a "zero rated" or "20% rated" contractor for the purposes of Relevant Contract Tax ("RCT"). Please see Part 15-01-46 of the Help to Buy Manual for further details.
The HTB scheme has been widely publicised since its announcement in 2016, particularly by financial institutions providing mortgages. However, if there are unique circumstances which has prevented an individual from claiming the HTB scheme, the taxpayer should contact Revenue with the relevant circumstances and each case will be considered on a case by case basis.
However, based on the information provided, it would appear that the builder was not a "qualifying contractor" at the time of purchase. As such, the couple in question will not qualify for the HTB incentive as all the conditions of the scheme have not been met.
