Cosgrove Gaynard Solicitors

The First Home Scheme Explained: A Complete Guide for First-Time Buyers in Ireland

Buying your first home is one of the biggest financial and legal decisions you will ever make. In Ireland, rising house prices mean many first-time buyers struggle to bridge the gap between their mortgage, savings, and the price of a new home.

To address this, the Irish Government introduced the First Home Scheme, a shared equity scheme designed to help first-time buyers and certain other purchasers buy a newly built home or self-build property.

This guide explains how the First Home Scheme works, who qualifies, the legal implications, and what buyers should consider before applying.

What Is the First Home Scheme?

The First Home Scheme (FHS) is a shared equity scheme where the Government and participating lenders take an equity stake in your home to help fund the purchase.

If your mortgage and deposit are not enough to buy a newly built home or self-build property, the scheme can provide up to 30% of the property’s purchase price (or up to 20% if you are also using the Help to Buy scheme).

In return, the State receives a percentage ownership (equity share) in your property, which you can buy back over time.

Who Is Eligible for the First Home Scheme?

You may qualify if you meet the following conditions:

1. First-Time Buyer (or Fresh Start Applicant)

You must be:

• A first-time buyer, or
• A “fresh start” buyer (for example, following divorce, separation, or insolvency)

2. Buying a New Home or Self-Build

The property must be:

• A newly built home, or
• A self-build on land you own or are purchasing

Second-hand homes do not qualify.

3. Mortgage Approval

You must:

• Have mortgage approval from a participating lender
• Borrow the maximum mortgage available to you

4. Price Caps Apply

The property price must fall within the regional price caps, which vary depending on location and property type.

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How Much Can You Get Under the First Home Scheme?

The scheme can fund:

• Up to 30% of the purchase price, or
• Up to 20% if you are also using the Help to Buy scheme

Example:

• Purchase price: €400,000
• Mortgage + deposit available: €320,000
• Shortfall: €80,000
• First Home Scheme equity: 20% (€80,000)

The State then owns 20% of your home until you repay it.

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Do You Pay Interest on the First Home Scheme?

Yes — but not immediately.

Can You Buy Back the State’s Share?

Yes. You can redeem (buy back) some or all of the equity share:

• At any time
• In minimum chunks (usually starting from 5%)
• When selling or refinancing the property

The amount payable is based on the market value of the property at the time of redemption, not the original purchase price.

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What Happens When You Sell the Property?

When you sell:

• The State receives its percentage share of the sale price
• Any remaining mortgage is repaid
• You receive the balance (if any)

If the property has increased in value, the cost of redeeming the equity will also increase.

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Legal Considerations for First-Time Buyers

The First Home Scheme adds extra legal complexity to your purchase.

A solicitor will:

• Review the shared equity legal documents
• Explain your obligations to the First Home Scheme
• Ensure compliance with lender and scheme requirements
• Register the State’s equity interest with the Property Registration Authority along with your ownership and the lenders interest

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How the First Home Scheme Works With Help to Buy

You can use both schemes together, but:

• The maximum equity reduces to 20%
• Help to Buy must be used first
• The combined funding must still fall within scheme limits

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Advantages of the First Home Scheme

• Helps bridge the affordability gap
• Allows earlier access to home ownership
• No rent payable on the equity share

PotentialDisadvantages to Consider

• The State benefits from future price increases
• Long-term costs increase if equity is not redeemed
• Limits flexibility when selling or refinancing
• Additional legal documentation and compliance

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Is the First Home Scheme Right for You?

The scheme can be extremely helpful, but it is not suitable for everyone. Buyers should consider:

• Long-term affordability
• Future income prospects
• Plans to sell or upgrade
• Ability to redeem the equity over time

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