In my last two posts, I discussed getting mortgage ready and the costs involved in buying a home.
Today, I’m going to talk about the two main Government Schemes available to help home buyers get on the property ladder.
These are the ‘Help to Buy Scheme’ and the ‘First Home Scheme’.
It is possible to use both schemes together but there are some limitations.
Help to Buy Scheme
This scheme is designed to help first-time buyers buy a NEW house or apartment or finance a self-build (runs until 31 December 2025).
It is only available on properties costing €500,000 or less.
The scheme gives you a refund of both the income tax and Deposit Interest Retention Tax (DIRT) that you paid in Ireland for the previous 4 years.
For most people the income tax refund will be the most significant part (especially as DIRT is a tax paid on interest earned on bank deposits and the interest paid by banks has been low for years).
You do not get a refund of PRSI or USC.
How do you qualify:
– You have not previous bought or built a home in Ireland or abroad.
– You must plan to live in the home for at least 5 years after buying.
– You have to take out a mortgage with a qualifying lender of 70% or more.
How much can you claim?
The lower of
€30,000.
10% of the market value of the property.
The amount of income tax and DIRT you paid for the 4 years before you apply.
A couple who are both working can claim (but the maximum you can claim together is based on the criteria above).
Who will this scheme suit:
– First time buyers buying or building a NEW home.
– People who have worked in Ireland for at a few years and ideally at least 4 years
What do you have to do to register?
– Register for a ‘MyRevenue’ account on the Revenue.ie website if you are a PAYE worker or ROS.ie if you are self-assessed.
– Complete a form 12 (PAYE) or a Form 11 (self-assessed) tax return for the last 4 years.
– Be tax compliant and pay any outstanding taxes that are due.
The scheme can be used in association with the ‘First Home Scheme’ or the ‘Local Authority Affordable Purchase Scheme’ but there are limitations when it comes to calculating the ‘loan to value’ ratio.
First Home Scheme
This scheme is designed for people who are having difficulty borrowing enough money to buy a home.
It’s a ‘Shared Equity Scheme’ where the Government and participating banks pay up to 30% of the cost of your new home and they get to own a share in your home.
You can buy back their share at any time, but you do not have to.
(If you are earning more money in a few years time, refinancing may make sense to buy out their share).
The scheme is available to first time buyers – to buy a new home, build your own home or buy the home you are renting if your landlord is selling.
The home must be NEW (with the exception of buying the home you are currently renting) and it must be your private residence (i.e. you can’t buy it as a rental property).
There are maximum property values which vary county by county, ranging from €475,000 for houses / €500,000 for apartments in Dublin and Cork, down as low as €325,000 for some rural areas of the rest of the country.
If you are living outside of Dublin or Cork, just do a search for ‘price limits for the First Home Scheme’ to find out the maximum in your area.
How do you qualify?
You must apply for a mortgage with a participating lender. These are Bank of Ireland, Permanent TSB, AIB, Haven Mortgages or EBS.
If you are getting an ‘exemption’ from the Central Bank’s limits you will NOT qualify for the FHS scheme (so max lending will be 4 times your gross income).
You’ll need a 10% deposit. (If you are availing of the ‘Help to Buy’ Scheme too, this can contribute to your deposit).
You can get a maximum of 30% funding with the FHS Scheme (or 20% if you are also using the Help to Buy Scheme).
In addition to these schemes, you could also check out the ‘Local Authority Affordable Purchase Scheme’ (which is another ‘Shared Equity Scheme’).
However, the ‘Help to Buy Scheme’ and the ‘First Home Scheme’ are by far the most popular schemes.
This wraps up my series on Buying a Home in Ireland. I hope these posts have helped some of you to be more informed about buying a home in Ireland.
I know times can be tough out there when trying to buy a house, but stay positive, it is possible, patience and following the correct processes will get your there! Nothing in life worth doing is ever easy!
If you would like to arrange a consultation, please contact me on the details below or Private Message me on Facebook. Remember, there are zero consultation fees for SA2EIRE members!
I look forward to helping in any way possible going forward.
Kind Regards
Danny Coad QFA
Tel: 0862422441
Tel: 00353862422441 (If contacting from abroad)
danny@sure.ie
Sure Financial Ltd is regulated by the Central Bank of Ireland.
16 May 2024 Last Updated: 16 May 2024
