The Help to buy scheme explained

Cosgrove Gaynard Solicitors

The Help to Buy scheme was created to support first-time property buyers in buying a new property as their principal residence. It is becoming increasing common for developers to accept a booking deposit along with the HTB funds as the balance deposit.

The HTB scheme explained

The Help to Buy scheme was created to support first-time property buyers in buying a new property as their principal residence.

 

What are the conditions of HTB?

The initiative is designed to help you with the deposit to buy or build a new house or apartment based on certain conditions:

- You must live there for five years after you buy/build it

- You must be tax compliant

- You must be a first time buyer - If you are buying it jointly with another person, this person must also be a first-time buyer (gifted or inherited property may not affect your eligibility).
- The building itself must be a new build and must have a purchase value of less than €500,000 if bought after 1 January 2017.

- The contractor you are buying your home from must also be approved by Revenue.

- You must take out a mortgage to qualify for the scheme and this has to be aminimum of 70% of the property's purchase value.

How much can you claim?

The amount you can claim is the lesser of: €20,000 (increased to €30,000 between 23 July 2020 and 31 December 2021 under the enhanced HTB scheme), 5% of the purchase price of a new home (increased to 10% between 23 July 2020 and 31 December 2021) or the amount of Income Tax and Deposit Interest Retention Tax(DIRT) you have paid for the four years before you apply.

How do I apply?

You first of all obtain approval under the scheme before you sign contracts.

Once contracts are signed by both parties i.e. you and the developer, you will have to upload a copy of the contract to the HTB system online. This will generate new HTB codes which you share with your solicitor. The HTB funds will then be released to the developer directly prior to closing.

Can I use the HTB funds as a deposit?

It is becoming increasing common for developers to accept a booking deposit along with the HTB funds as the balance deposit.


Clawback

HTB funds can be clawed back, however, if you were not entitled to it, you did not live in the property for a minimum of five years or you did not complete the process of buying or building the property in question.

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