The expanded help-to-buy scheme for first-time property buyers has opened for applications, the Revenue has confirmed.
Prospective homeowners can claim a refund on income tax and deposit interest retention tax (DIRT) from the previous four years to help with the deposit needed to buy a new house or apartment.
Applicants can now claim back up to 10% of the property’s value, €30,000 or the total amount of income tax or DIRT they’ve paid in the past four years, whichever is lesser.
The original limits on the tax rebate had been set at 5% of the property’s value or €20,000. The criteria of the scheme remains otherwise unchanged.
So applicants can claim up to 10% of the cost of a €300,000 home or 10% on more expensive properties up to a maximum value of €500,000.
However, first-time buyers who have signed a contract to purchase a new home, or who have drawn down the first tranche of their mortgage in the case of a self-build, prior to July 23 will not be eligible for the scheme, although they can still avail of the original HTB scheme.
The enhanced scheme is available to applicants to mortgage holders on new or self-built properties who have or will sign contracts or draw down the first tranche of their mortgage between July 23 and December 31, 2020.
Buyers who have already submitted an application under the original HTB scheme but who satisfy the requirements of the enhanced HTB relief may cancel their original application and reapply for the new scheme, Revenue said.
Similarly, applicants who have applied for the old scheme whose applications have not yet been verified who satisfy the requirements for the new scheme may cancel and reapply for the enhanced scheme.
Applicants for the original scheme who have been verified, meanwhile, may request a review through the Revenue by going to ‘MyEnquiries’ on their ‘myAccount’ Revenue.ie portal.
New applicants can now make their applications through ‘myAccount’ or Revenue’s Only Service, ROS.
Critics of the help to buy scheme maintain that it disproportionately helps higher earners get onto the property ladder while in turn pushing house prices even higher.
The Irish Home Builders Association welcomed the expansion of the scheme when it was announced last month while members of Labour and Sinn Fein called for the scheme to be scrapped entirely.
Sinn Fein finance spokesperson Pearse Doherty called the scheme ‘policy on the hoof’ that would ‘cement the pricing behaviours of developers who have no incentive to reduce house prices.
The latest CSO property price index shows the national median average price for a residential property sold in the 12 months to the end of May was €260,000.
Source: George Morahan Extra.ie