A first-time buyers grant refers to any government or private incentive that assists new buyers in purchasing a property. Within Ireland, at the moment, several schemes exist, the most pertinent of which are the Help-To-Buy (HTB), First Home Scheme and Local Authority Housing Loan.
In this article, we will look at the different grants available, how they work and the pros and cons of each scheme.
First up on the agenda is the help-to-buy scheme. This scheme was initially created in January 2017 and then an enhanced version in spring 2020.
The HTB scheme assists first-time homebuyers by providing financial aid to cover the deposit required to buy or construct a new house or apartment.
The scheme requires that the property be intended for personal occupancy as a primary residence.
The HTB Scheme has very specific criteria; you will qualify if you are a first-time buyer who either buys or self-builds a new residential property between 19 July 2016 and 31 December 2024.
In some instances, you may be entitled to claim a refund of income tax and DIRT that you paid over the previous four tax years.
The HTB grant is awarded to individuals or couples who meet predetermined criteria; the primary condition is that the property they wish to purchase will be their intended primary residence.
It works via an application process; there are three stages within this process.
If you're a PAYE employee or a self-assessed taxpayer, you may be eligible to apply for this scheme through Revenue's myAccount service or Online Service (ROS).
To get started, PAYE employees can log in to their “myAccount” service, while self-assessed taxpayers can apply through ROS. You will also need access to MyEnquiries, a secure communication method to correspond with Revenue.
You can find MyEnquiries on your My Services screen under 'Other Services' if you're a ROS business user. For PAYE employees, you can access MyEnquiries through myAccount.
Once you have submitted your application and it has been approved, you will receive a summary of the maximum amount you can claim. It's important to note that you must be tax compliant to be eligible for this scheme
If you meet all the mandatory criteria and your application is approved, you can claim using ROS or MyAccount.
You may need to provide documents about your mortgage and confirm details about the property you intend to purchase.
Once you have provided all of the required information, it will need to be verified by an official verifier. This is often the contractor or property company if you are buying a new home or your solicitor if you are building your own home.
You can get complete details of the process from Revenue.
If you are a “First time home buyer”, you may be able to buy your home at 30% or 50% lower than market value by relinquishing some of the equity in your home to a participating bank.
The first home scheme was created in July 2022 and was a measure the government took to assist in easing pressures on the housing sector. The system is part of the affordable housing initiative. It works by participating banks buying equity in your home, which you can choose to repay within a timeframe that suits your circumstances.
There is a set criteria for who qualifies for the first home scheme; the applicant(s) must be classed as a “first-time homebuyer” or a " fresh start" applicant purchasing a new home.
The criteria for a “first-time home buyer” are precise. To be considered a “first-time homebuyer”, you must not have purchased or constructed a property to live in. Also, you must not have property interests in Ireland or other countries. You would not be classified as a first-time homebuyer if you inherited a home abroad.
On the other hand, if you are a 'fresh start' applicant, you may have previously owned a home but no longer hold any financial interest in it due to a divorce, separation, personal insolvency, or bankruptcy.
If you buy the property jointly with someone else, they must also meet the criteria of a first-time homebuyer or 'fresh start' applicant.
Moreover, the purchased property must be a new construction in a private development, as the scheme excludes second-hand homes or self-built residences.
The first home scheme works by applying for a mortgage with a participating lender, the lender (upon a successful application) will approve your mortgage with a 30% / 50% price reduction. The participating lender will then own the % as mentioned above in equity in your home.
You have the option to repay the participating lender for the money they loaned at 0% interest. Although theoretically you could live in the property without ever repaying the money. It would only be upon your death or selling the property that the loan must be repaid in full.
A local authority home loan differs from the other two schemes as it can be used to purchase new, second-hand, and Self-build properties.
The Local Authority Home Loan is a mortgage scheme supported by the government that targets first-time homebuyers and other qualified applicants. The program offers loans at a reduced interest rate and can be used to buy new or used properties and fund home construction. The interest rates for the loan are set for the entire duration of the mortgage, guaranteeing a steady payment throughout its term.
The amount of money you can borrow depends on the market value of the property you are interested in buying or building and can go up to 90% of that value. However, the maximum market value differs depending on your property's location, with recent updates coming into effect as of 1st March 2023. For instance, in
In the eventuality that you do receive pre-approval for a loan before the updated limits, then you can request a reassessment of your eligibility amount by contacting the local authority, and no new application is necessary.
The Local Authority Home Loan Scheme has similar qualifying criteria to the first-time home scheme. The scheme allows applications from “First-time buyers” and ‘fresh start’ applicants.
Fresh start applicants are accepted when they:
Local authority housing loans work through an application process, the local authority will accept applications from any applicant who meets the exclusionary criteria. Once the local authority receives the application they may require additional documents - in this instance they will contact you directly.
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