Help to buy scheme
This is a really attractive incentive for first time buyers.
Help to buy scheme for new houses costing up to €500,000
The implications of the new incentive are that you only need to save 5% of the purchase price up to €400,000
Example . Buy a house for €250,000- deposit required €25.000(10%) Get tax rebate €12,500 and savings €12,500.
Example: Buy a house for €400,000 with lenders requiring , 10% deposit = €40,000 - you will need to save €20,000 with potential additional €20,000 from help to buy tax rebate.
€500,000 at 10% deposit = €50,000- you need to save €30,000 with potential additional €20,000 from help to buy tax rebate
The rebate is available to first time buyers of new houses, apartments or self builds, subject to a limit of 5% of the purchase price up to a maximum of €20,000.
To avail of the tax rebate you must be registered for Revenue's online My account service.
- Scheduled to apply to contract signed after 19th July 2016 and before 31/12/2019
- You will not qualify for the rebate if you have previously bought, built or inherited a property either individually or jointly with someone else.
- The finance bill proposes that you must take out a mortgage of up to 70% of the valuation approved by the mortgage provider.
- Price ceiling of €500,000 after 01/01/2017
- Incentive not available to cash buyers or investment property buyers.
- If you are buying the property with somebody else they must also be a first time buyer.
- You must occupy the property for a period of five years from the date it is habitable. If you sell the property within this period the rebate is clawed back on a pro rata basis.
Lenders are still working out the mechanics of the scheme and it seems that you will need clear evidence that your tax affairs are up to date and details of tax paid for the past four years prior to arranging loan approval.