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 the State over the previous four years, subject to limits outlined in the legislation.
The legislation governing the HTB scheme is set out in section 477C of the Taxes Consolidation Act 1997. For the purposes of the scheme, “income tax payable”, in relation to an individual for a year of assessment, means the chargeable tax less the aggregate of the personal tax credits and general tax credits.
I am advised by Revenue that where an individual does not pay Income Tax or DIRT in the State but pays the equivalent in another State, Revenue are not in a position to rebate tax paid in a different jurisdiction. The Double Taxation Agreement concluded between Ireland and the UK does not contain any provisions which permit Revenue to refund tax paid in that jurisdiction for the purposes of the Help to Buy incentive.
Irish tax resident individuals are liable to Irish tax on their worldwide income. Should an individual file an Irish tax return and incur an Income Tax liability on other income streams, then the amount of Income Tax paid may well be refundable under the HTB incentive, subject to the other conditions of the scheme being met.
In this instance, given that the individual has not paid any Income Tax in the State, the HTB scheme cannot be availed of as Revenue cannot refund tax in those circumstances
