The Help To Buy Scheme Explained

If you are saving for a house or are already house hunting you may have heard of this scheme. But as with most government schemes, it can be very confusing to get your head around what they are actually offering.

As I haven't bought my house yet, I haven't completed this scheme from start to finish, but I have been approved for it. 🎉 So here's what you need to know on how to get to the approval stage anyway....

What is the scheme:

The Help To Buy Scheme is a government incentive which helps first time buyers obtain the necessary deposit required to buy or build a house.

Do you get free money?

Well sort of. What Revenue are offering is a tax refund of up to €20,000 or 5% of the house price (max price €500k) for qualifying newly built homes.

Let's break that sentence down:

The tax - this is income tax or DIRT (not USC or PRSI) that you (and your partner) have paid over the last four years. You can check how much you paid by logging into your Revenue account or by looking back on your P60's. So let's say you and your partner paid €2,000 (each) tax over the last four years, you could be entitled to a nice juicy €16,000 tax refund.

The refund - From 2017 the buyer does not get the refund paid directly to them, it goes directly to the contractor, or to the bank if you are building yourself. 

Qualifying newly built homes - This is where they get ya. The house has to be a newly built property, built by a qualifying contractor. What's a qualifying contractor?! Revenue have a nice list - here. But if you are looking at at house you can just ask the estate agent does it qualify for the scheme.

For example, you want to buy a house for €300,000:

Deposit needed (10%) = €30,000

Refund Available (paid to the contractor) = €16,000

Deposit payable by you = €14,000

The price of the house or stamp duty does not change, just the deposit payable by you is reduced. 

So to summarise with a few keywords......newly built house, lesser deposit needed, based on four years of tax paid. You following?

So how do you go about getting this? It's actually pretty simple:

Step 1: Go to www.revenue.ie and logon or register for 'MyAccount'. Both applicants need to do this if buying as a couple.

Step 2: Fill out the Form 12's for all outstanding years, this is a pre-populated form so you just need to tick a few boxes to confirm a few details.

Step 3: (Only one person is to do this) Go to the Help To Buy section while logged into MyAccount and start the application. If applying as a couple you need to add your partner and they need to accept from their account.

Step 4: Select the years you want to claim a tax refund for, you may as well select all of the previous four years.

And that's it, the application goes through and you should get a notification a few days later of how much you've been approved for!

I'll give you more deets when I actually buy a house, well if I buy a new one! 

Hopefully this helps!

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