Dáil Éireann Debate, Tuesday - 7 November 2017
210. Deputy Eoin Ó Broin asked the Minister for Finance if it is possible under EU VAT rules to apply selectively a reduction on the current rate of VAT to certain categories of house purchases, such as those bought by first-time buyers, houses on sale or sold at a price below a specified affordability level; and if VAT can be refundable or rebatable in the categories specified. [46108/17]
Amharc ar fhreagraThe VAT rating of residential property is subject to EU VAT law, with which Irish VAT law must comply. In accordance with the EU VAT Directive, the VAT Consolidation Act 2010 applies the reduced VAT rate of 13.5% to the supply of new residential property. In general, VAT is chargeable to the purchaser on the sale of all new residential property but the purchase of second-hand residential property is exempt from VAT.
The VAT Directive does not permit the application of different VAT rates to different categories of house purchases such as first time buyers or houses on sale or sold below a specified affordability level. In addition, the VAT Directive does not permit a rebate or refund of VAT charged to a private person who incurs VAT on the purchase of residential property. However, the Deputy will be aware that the Help-to-Buy scheme provides an income tax relief for first-time buyers of 5% of the purchase price of a new house or apartment, or of the valuation of a self-build, up to a maximum of €400,000.
