It is undeniable that buying your first home is exciting but the process of securing a deposit can feel overwhelming. Having an awareness and understanding of all the tools at your disposal is an effective step towards alleviating some of the stress you may feel. One such invaluable tool is the Help to Buy (HTB) Scheme. Let's delve into everything you need to know about it.

What is the Help to Buy Scheme?

The HTB Scheme is a government initiative aimed at helping first time buyers in securing funds for the deposit required to buy or self-build a new home. It provides a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid over the four tax years preceding your HTB application.

How much can you claim?

Where you sign a contract for a new house or draw down on a self-build mortgage between 23 July 2020 and 31 December 2025, you can claim relief on the lesser of €30,000; or 10% of the property's purchase price or completion value of a self-build; or the total amount of income tax and DIRT in the previous four tax years.

To be eligible for the HTB, the home's value must not exceed €500,000. For instance, a home valued at €250,000 could qualify for a refund of up to €25,000, while a €300,000 home could receive up to €30,000. If, however, the home is valued at €450,000, the refund would still only be up to €30,000 as that is the maximum refund amount allowed.

Who can claim the HTB refund?

The HTB Scheme is available to first time buyers looking to buy or self-build a new residential home between 1 January 2017 and 31 December 2025. Those who have previously bought a home on their own or with someone else, will not be eligible for the HTB.

HTB applicants must also be tax compliant or have tax clearance if self-assessed. Additionally, they must also intend to occupy the home as their primary residence, which means landlords or investors are excluded from HTB eligibility.

What homes are eligible?

Only newly built residential houses or apartments, including one-off and self-build homes, are eligible. Applicants must commit to residing in the home as their primary residence for at least five years post-purchase.

What do you need before applying?

To qualify for HTB relief, you must secure a mortgage of at least 70% of the purchase price or valuation of your home.

Before applying for HTB relief, you must also ensure that you have submitted an Income Tax return for the relevant four-year period and clear any outstanding taxes beforehand.

How do you apply?

The application process consists of three stages:

• Application Stage: PAYE taxpayers can apply via Revenue's myAccount service, while self-assessed taxpayers can apply through Revenue's Online Services (ROS). You will also need access to MyEnquiries for correspondence with Revenue. If you are tax compliant, your application will be approved and you will be given a summary of the maximum amount you can claim.

• Claim Stage: Once your application is approved, you can submit your claim through ROS or MyAccount. At this stage you will need to provide documents about your mortgage and confirm details about the property.

• Verification Stage: The information you have provided must be verified by an eligible verifier, i.e., contractors for new home purchases or solicitors for self-builds.

Upon approval, the refund is paid directly to the contractor, and for self-builds the refund is paid to a bank account you hold with your loan provider.

While securing the deposit for new home is a significant step, understanding the mortgage process as a whole is also important. For guidance on preparing for your mortgage application and organising your finances before embarking on the application journey, reach out to us.