Dáil Éireann Debate, Tuesday - 8 September 2020
259. Deputy Cathal Crowe asked the Minister for Finance if clarification will issue on the newly enhanced help-to-buy scheme for first-time buyers who have commenced the process and have received approval for HTB at the 5% rate and need to know their entitlements under the new rate; and the way in which the extra finance will be issued in cases in which a 5% deposit may already have been paid by the buyer. [21360/20]
Amharc ar fhreagraThe 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.
The Government recently announced a temporary enhancement to the existing HTB scheme for the remainder of 2020 as part of the July Stimulus plan. The legislation to give effect to this increase has been outlined in the Financial Provisions (Covid-19) (No.2) Act 2020 and was signed into law on 1 August 2020.
In summary, the legislation provides that where applicants
(I) enter into a contract for the purchase of a new house or apartment, or
(ii) make the first draw down of the mortgage in the case of a self-build property,
during the period from 23 July 2020 to 31 December 2020, they will be eligible for increased relief under the HTB scheme to the lesser of:
- €30,000 (increased from €20,000),
- 10 per cent (increased from 5 per cent) of either the purchase price of the new home or, in the case of self builds, the completion value of the property, or,
- the amount of Income Tax and DIRT paid in the four years prior to making the application.
All other conditions of the original HTB scheme remains the same.
As regards the Deputy’s question, if an applicant is purchasing a house (rather than self-building) and has entered into a contract to purchase his or her first home prior to 23 July 2020, he or she will not satisfy the conditions to avail of the temporary enhanced HTB relief. However, if an applicant is self-building a new home, and he or she draws down the first tranche of the mortgage between 23 July and 31 December 2020, then he or she may be able to avail of the temporary enhanced HTB relief.
I have been advised by Revenue in relation to the extra finance to issue, the process is as set out in legislation, thus in the case of purchasing a house, the extra 5% is paid to the qualifying contractor and the contractor shall treat the appropriate payment as a credit against the purchase price of the house. In the case of a self-build the extra 5% will be to the applicant’s qualifying loan bank account. In any event where an applicant has a HTB application approved with Revenue under the original HTB scheme but believes he or she satisfies the requirements of the enhanced HTB relief, he or she should contact Revenue via MyEnquiries outlining the specific details to have the claim reviewed.
Finally, Revenue has published Tax and Duty Manual 15-01-46 on its website, which contains detailed guidance on all matters relating to HTB, including the temporary enhanced HTB scheme.
