Help to Buy (HTB) Incentive.
The Help to Buy incentive is designed to assist first-time buyers with obtaining the deposit required to purchase or self-build a new house or apartment to live in as their home.
The incentive provides for a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid over the previous four tax years to first-time buyers who purchase or self-build a new house or apartment to live in as their home.
The main provisions, as set out in the Finance Act are outlined below.
Who is entitled to claim?
A first-time buyer of a house or apartment who purchases or self-builds a new residential property between 19 July 2016 and 31 December 2019 may be entitled to claim a refund of Income Tax and DIRT paid over the previous four years.
The first-time buyer must not have either individually or jointly with any other person (directly or indirectly), previously purchased, or built a house or apartment. Where more than one individual is involved in purchasing or building a new home, all of the individuals must be first-time buyers.
You must be tax compliant. If you are self assessed you must also have eTax clearance.
What is a qualifying property?
For a property to qualify under the scheme it must have been purchased or built as the first-time buyer’s home. It does not include properties acquired for investment purposes. It must be a new build and the construction must be subject to VAT in Ireland. Properties which have never been used as a dwelling and are now being converted for residential use may qualify.
The purchase value of the property cannot be more than €500,000 for properties bought after 1 January 2017.
For properties purchased between 19 July 2016 and 31 December 2016 the value cannot exceed €600,000.
For self-built properties the purchase value means the approved valuation by the qualifying lender at the time that the qualifying loan is entered into.
You must take out a mortgage on the property with a qualifying lender and this loan must be used solely for the purchase or building of the property. The loan should be entered into solely by the first-time buyer and the lender. A guarantor on the loan is allowed. The loan to value ratio must be greater than 70%.
What you need to do before you apply
Before you apply, you must be registered for myAccount (PAYE) or ROS (self-assessed).
PAYE taxpayers need to submit a Form 12 (where they have not already done so) for each of the tax years they select. On receipt of your Form 12, Revenue will send you a Form P21 Balancing Statement. You must hold a Form P21 for each of the years you select before you apply for the Help to Buy incentive.
Online Forms 12 for 2013 onwards are available through myAccount and are pre-populated with your pay and tax details. When you have completed the paper Form 12, you can scan it and then upload it in MyEnquiries. To do this, you can click Add New Enquiry, and select ‘Help-To-Buy Scheme’ and ‘Form 12 (2012)’ from the dropdown options available under ‘My Enquiry Relates To’ and ‘And More Specifically’. Then you attach the scanned Form 12 documentation and submit your enquiry.
Self-assessed taxpayers must be fully compliant, have eTax clearance, and must therefore have paid and filed for the years in which they are a chargeable person. Online Forms 11 are available for all years through ROS.
How to apply
You can apply online. There are two stages to the HTB electronic process - an application stage and a claim stage.
A. Application Stage
You will be required to provide your PPSN, and complete a declaration. Provided that you are tax compliant you will be provided with an Application Number and a summary of the maximum relief available to you. You will be issued with an Access Code separately through MyEnquiries. You should retain both of these safely as you will require them for your lender. If you are purchasing your home you will require these for your qualifying contractor, or if self-building you will require these for your solicitor. Your contractor or solicitor will require this information to verify the tax relief claim.
B. Claim Stage
Once you have signed the contract for your home and are ready to make your claim complete the following steps;
Step 1 – Upload the following information about your application through MyEnquiries. (You should take note of the reference number given).
a copy of the signed contract
evidence of your mortgage (including loan-to-value ratio)
proof of drawdown of the first tranche of the relevant mortgage (if a self-build).
Step 2 - You should then login to HTB through myAccount or ROS and make your claim. You will need to include your MyEnquiries reference number. You will be asked to confirm details relating to the property, the purchase price, date of completion, mortgage details, and the deposit already paid. Group applicants will also need to provide the amounts of the agreed portion of the refund applicable to each member of the group. Self-build claimants will need to provide the BIC and IBAN of the qualifying loan bank account. Once you have submitted your claim you will be provided with a claim number.
Please ensure you have carefully checked all the information you input before signing and submitting the claim. It will not be possible for you to cancel the claim afterwards.
Step 3 - Once the claim is submitted, you should advise your Developer/Contractor, or, Solicitor if you are self-building, and provide them with your claim number and the access code already provided. Before any refund is paid, the information you have given will need to be verified by
the Developer/Contractor in the case of a new purchase, or
a Solicitor, acting on your behalf, in the case of a self-build.
Information for Lending Institutions
You may verify the maximum relief available to a Help to Buy applicant using the Application Code and Help to Buy Access Number. This information is given to the applicant when they have completed their application, and they should pass this on to you to verify.
The HTB refund may change once the purchase price of the property is confirmed.
Information for Solicitors
Where a HTB applicant is self-building a new house, his or her solicitor is required to verify the HTB applicant’s claim. Before a solicitor can verify a HTB claim, he or she must first apply to Revenue to be a registered solicitor for the HTB incentive. To be a registered solicitor for verifying HTB claims (from self-builders, only), a solicitor is asked to submit a completed HTB2 Form through MyEnquiries in ROS, as Help to Buy Scheme – Solicitor Approval.
Information for Contractors
Contractors wishing to operate the HTB incentive will need to provide the following information to Revenue:
evidence of tax compliance; which means that a contractor has a Relevant Contracts Tax rate of zero or 20%
the contractor’s VAT registration details
evidence of an up-to-date tax clearance certificate
details of qualifying residences which the contractor offers, or proposes to offer, for sale within the period that the incentive is available
details of the planning permission(s) under the Planning and Development Acts 2000 to 2015 in respect of the qualifying residences which the contractor proposes to construct within the period that the incentive is available
details of the freehold, leasehold estate or interest in the land on which the qualifying residences are constructed or to be constructed, and
any other relevant information that may be required by Revenue for the purposes of assessing an application as a qualifying contractor
For a contractor to become part of the HTB process, they must first apply to Revenue to register as a ‘Qualifying Contractor’. This is done by submitting a completed HTB1 Form through MyEnquiries in ROS, as Help to Buy Scheme - Contractor Approval. A Summary Guide for Contractors is provided to aid in this process.
Contractors should click Add New Enquiry, and select "Help-To-Buy Scheme" and "Contractor Approval" from the dropdown options available under "My Enquiry Relates To" and "And More Specifically".
Contractors should attach the necessary information and supporting documentation (as listed above). MyEnquiries can be used to attach up to 10 attachments, with each attachment up to 10MB in file size. As part of their application for approval, contractors should confirm their agreement to Revenue publishing their summary details as qualifying contractors.
Claims Compliance - Clawback Provisions
There are a series of clawback provisions which are linked to entitlement to the refund, ceasing occupation of a qualifying residence or non-completion of a purchase or non-completion of a qualifying residence. In the period from 1 January 2017 to 31 December 2019, contracts between first-time purchasers and qualifying contractors will result in the refunds being paid directly to the contractors as a credit against the purchase price or deposit of the qualifying residences.
‘Clawback’ from a qualifying contractor will happen where:
the qualifying residence is not subsequently purchased by the claimant within two years from the date of the making of the refund payment to the contractor, or
if, in the opinion of Revenue, there are reasonable grounds to believe that the purchase of the qualifying residence by the claimant will not be completed within that two year period.
There will be some flexibility around the two-year period where Revenue are satisfied that the qualifying residence is substantially complete at the end of the two year period or is likely to be completed within a reasonable period of time thereafter.
Once the residence is completed and conveyed to the first-time purchaser any further compliance responsibilities, such as the obligation to use the house as a principal private residence for a period of five years, become the sole responsibility of the purchaser as the developer cannot be held responsible for such matters.
Contact details for Help To Buy Incentive Customer Type Contact Information
Applicants: use MyEnquiries in myAccount (PAYE) or ROS or phone our LoCall service.
Contractors: should submit the necessary information using MyEnquiries.
apply for electronic tax clearance in ROS.
access their RCT details from the eRCT system, and they can self-review within the eRCT system. Queries about RCT deduction rates may be directed to their local tax district.
Source : Revenue.ie