The Help to Buy Incentive (HTBI), an initiative introduced under the ‘Rebuilding Ireland, Action Plan for Housing and Homelessness’ by the Minister for Finance, aims to facilitate first-time buyers to step onto the property ladder. The Finance Act 2016 lays down the provisions of this scheme. The Revenue Commissioners website provides comprehensive details on the application process for First Time Buyers, Qualifying Contractors, and Mortgage Lenders.
The HTBI is exclusively for First Time Buyers purchasing their main residence, thereby offering a boost to those who are struggling to accumulate the substantial deposit often needed for property purchase. However, it is incumbent upon these buyers to complete the application process to establish the payment amount they are eligible for under the scheme.
The scheme applies not only to newly constructed homes but also ‘self-build’ residences, which need to meet the qualification criteria. This means First Time Buyers who aspire to construct their dream home from scratch can also avail of the benefits of the scheme. However, for a property to qualify for the HTBI, it must be part of a development constructed by a contractor who meets the scheme’s qualifications.
The HTBI imposes certain caps on the value of the property that can be purchased. The maximum purchase value under this scheme is set at €500,000. However, there was a slight deviation during the period between 1 July and 31 December 2016, where properties with a maximum value of €600,000 were considered eligible.
The HTBI scheme also requires the loan-to-value ratio of the mortgage not to be less than 70%, which ensures a substantial level of commitment from the buyer towards the purchase.
The amount of the HTBI a buyer is eligible for is 5% of the purchase value of the property, up to a maximum of €20,000. This financial incentive serves as a significant boon to buyers, reducing the initial financial burden.
First Time Buyers can initiate the claim process once they have officially agreed to purchase a qualifying property. However, the purchase should be completed within two years of receiving the payment from the Revenue Commissioners. Failure to do so might result in a clawback of the payment by the Revenue Commissioners.
Additionally, to ensure that the scheme benefits genuine homebuyers rather than investors, a clause has been incorporated into the HTBI that mandates the First Time Buyers to occupy the property for five years from the date it is deemed habitable.