2017-21 help to buy scheme - megathread. All help to buy discussion here please

awec

mickey15ie wrote: »

Afternoon All,

I am currently in the middle of a self build.

I returned to Ireland in June 19, my partner and I both worked in the UK for 10 years.

We have both been in employment since June 2019.

Will we be able to came an element of the first time buyers/help to buy scheme?

You'd be able to use your tax from 2019 only.

mickey15ie

Do you mind me asking why only 2019?

House more than likely will not be complete till 2021.

Brianmwalker

When is say the scheme will end in Dec 2021,does my house have to be built by then or can I still be in the process of building?

awec

mickey15ie wrote: »

Do you mind me asking why only 2019?

House more than likely will not be complete till 2021.

The 2020 tax year is not finished. If you want to include 2020 taxes, you'll need to wait until 2021 to apply.

mickey15ie

Also on a self build, is there a cap on value?

Does the price of the site have to be included in the value?

awec

mickey15ie wrote: »

Also on a self build, is there a cap on value?

Does the price of the site have to be included in the value?

Cap is 500k and it's whatever proposed valuation your lender has given the finished property.

You also need to have a mortgage of at least 70% the proposed valuation.

dalex15

Paremon2 wrote: »

Financial Provisions (Covid-19) (No. 2) Bill 2020

Amendment of section 477C of Act of 1997
8. The Act of 1997 is amended in section 477C by inserting the following subsection after
subsection (5):
“(5A) Where an individual has, in that part of the qualifying period
beginning on 23 July 2020 and ending on 31 December 2020, either—
(a) entered into a contract with a qualifying contractor for the purchase
by that individual of a qualifying residence, that is not a self-build
qualifying residence, or
(b) drawn down the first tranche of a qualifying loan in respect of that
individual’s self-build qualifying residence,
paragraph (a) of subsection (5) shall apply subject to the following
modifications:
(i) in subparagraph (i) of that paragraph, ‘€30,000’ shall be substituted
for ‘€20,000’;
(ii) in subparagraph (iii) of that paragraph, ‘10 per cent’ shall be
substituted for ‘5 per cent’.”.

The Bill will be debated in Dail Eireann on Wednesday & in the Seanad on Thursday.
Ref:

Revenue.ie will then be updated to reflect the outcome.

Housing Minister Darragh O'Brien has advised on Newstalk yesterday that he is looking into whether existing HTB applicants who have signed contracts pre 23rd July, claimed HTB but not yet drawn down the mortgage will be eligbile or not & expects to have more info today.
Ref

This makes it clear, hopefully by Friday we'll have a clearer picture where we stand.
I hope Revenue will just update every application to the new scheme limit and amounts, so we don't have to reapply.

I know a lot of people are saying the scheme was bad as it was, as it's just inflating prices. Me, as a first time buyer, the most difficult part in buying a house was just to save the deposit + fees. Paying an extra 10k on my mortgage (if house price goes up), it's peanuts compared to the already high rent I'm currently paying.

Jasna1982

dalex15 wrote: »

This makes it clear, hopefully by Friday we'll have a clearer picture where we stand.
I hope Revenue will just update every application to the new scheme limit and amounts, so we don't have to reapply.

I know a lot of people are saying the scheme was bad as it was, as it's just inflating prices. Me, as a first time buyer, the most difficult part in buying a house was just to save the deposit + fees. Paying an extra 10k on my mortgage (if house price goes up), it's peanuts compared to the already high rent I'm currently paying.

I agree to a certain extent. Saving for the deposit is really tough.
But without banks doing exceptions, no way can a lot of people get a mortgage anymore anyway.

thatsmighty

Hi,

I am wondering if anybody managed to get Help to Buy for an extension and if so, had it been previously occupied.

I am planning on splitting a folio which would create a new house and a granny flat onto it and I am not sure if this would qualify. Thanks in advance for any info.

Jen Pigs Fly

thatsmighty wrote: »

Hi,

I am wondering if anybody managed to get Help to Buy for an extension and if so, had it been previously occupied.

I am planning on splitting a folio which would create a new house and a granny flat onto it and I am not sure if this would qualify. Thanks in advance for any info.

To qualify for HTB, you need to be a first time buyer (as per revenue) and it needs to be a new build or self build.
I highly doubt an extension will qualify for this as you already own a house.

Jen Pigs Fly

dalex15 wrote: »

I know a lot of people are saying the scheme was bad as it was, as it's just inflating prices. Me, as a first time buyer, the most difficult part in buying a house was just to save the deposit + fees. Paying an extra 10k on my mortgage (if house price goes up), it's peanuts compared to the already high rent I'm currently paying.

The major problem with the prices going up are the people who did not have enough tax to qualify for the entire rebate.

For example, we bought last year, we qualified for €17,500 HTB, however, we were restricted to less than that due to the tax that we paid over the 4 years.
So with these new rules, we would still only qualify for the €16000, but now the house has gone up by €10k which mean in our situation and others situation you’d need to scrap together another €10k you didn’t initially need. All because we did not pay enough tax over 4 years we would now need to save more money.

This HTB rise will be of huge benefit to some and a huge detriment to others.

ClaptonBay

Bob2019 wrote: »

Signed our contracts 3 weeks ago, but yet to draw down mortgage. House is now fully completed and snag’s fixed. Called our solicitor to see if there was anyway we could nullify our contract and resign with the builder. He said no hope as the contract is uploaded to revenue at this stage. Anyone Look into anything similar or any other method of availing of the 10%?

Per the wording being put forward I don't think there's any chance for those who signed a few before 23rd July. There might be a window for those who have signed two weeks before this date depending if the contracts haven't yet been uploaded to revenue to claim the HTB amount.

The increase is only benefiting the buyer. To try and nullify the contracts at this point, the developers solicitors would have to agree and you mostly likely would have to cover their cost along with any extra work by your own solicitors. Why would the developer entertain any of this hassle though? As far as they are concerned the contracts are already signed and sale is agreed.

It's unfortunate for anyone who has signed in the last month. Maybe they will backdate it due to the delay with some of the houses due to covid, but very doubtful. Just my two cents.

GingerLily

Jen Pigs Fly wrote: »

For example, we bought last year, we qualified for €17,500 HTB, however, we were restricted to less than that due to the tax that we paid over the 4 years.

If you didn't have the amount paid in tax you didn't 'qualify' for that amount.

If we gave everyone the money regardless of contribution you'd have a much much larger group of people trying to buy these houses including people returning home from abroad who've not taxes here in a while or ever (non residents too would qualify, that could get messy).

Maybe it's because we qualified for our maximum HTB, but I agree with the rule to keep it a rebate and not 'free money'.

PTO

The latest from askpaul over on Instagram is attached below (sorry, don't know how to embed).

We have our contracts being sent to our solicitor today. Approved for 18.6k on htb. Would I be right in saying we need to stall now for the next few weeks and hope we get more for the htb when it goes through the Dail?

The_Conductor

Smouse156 wrote: »

Hey, sorry if this is an obvious question but I know help to buy relates to tax paid over previous 4 years. I’ve been abroad last few years and if I buy next year, my only eligible year is 2020 to claim. Can I claim the full €20k/€30k based on one years income tax even if the previous 3 years were zero?

Yes you can- but obviously, its limited to the amount of income tax (as opposed to other deductions) you paid in the eligible year. Aka- you can't count USC, PRSI and other deduction- just income tax. So- the max you can claim- is the max you paid- or 30k (depending on the price of the property) whichever is lower.

islander35

PTO wrote: »

The latest from askpaul over on Instagram is attached below (sorry, don't know how to embed).

We have our contracts being sent to our solicitor today. Approved for 18.6k on htb. Would I be right in saying we need to stall now for the next few weeks and hope we get more for the htb when it goes through the Dail?

Yes. That’s what I’m doing. I signed everything but my solicitor will date it and send it once it has gone through the Dail and we know whether or not we need a new HTB code from Revenue.

Smouse156

The_Conductor wrote: »

Yes you can- but obviously, its limited to the amount of income tax (as opposed to other deductions) you paid in the eligible year. Aka- you can't count USC, PRSI and other deduction- just income tax. So- the max you can claim- is the max you paid- or 30k (depending on the price of the property) whichever is lower.

Thanks for that! I was worried it was restricted to €7.5k per year or €5k per year before the increase and you had to have 4 years. We pay a lot of tax so should be ok for the full amount based on a single year

The_Conductor

Smouse156 wrote: »

Thanks for that! I was worried it was restricted to €7.5k per year or €5k per year before the increase and you had to have 4 years. We pay a lot of tax so should be ok for the full amount based on a single year

Plug the figures into the calculator when you apply and come back and let us know how it transpires?

Brendan2020

I am in the same situation. Approved for the full 20k and I signed my side of the contracts in early July but have not received contracts back from the builder.

There are going to be many scenarios where people could be stuck:

1. Drawn down HTB already before 23rd July. Probably won’t be able to avail of new scheme

2. Signed contracts but not drawn down HTB. If contracts are before the 23rd, builder is at no obligation to change the date on the contract. Unfortunately this is the way it is but people could get their solicitors to push this issue.

3. Approved for HTB but no house bought. Can only avail of new scheme if contracts signed before 31st dec, otherwise it will revert to old scheme.

I am currently going through this with my solicitor as we have already paid over our cash side of the deposit. Also legal issues are going to arise as we have potentially transferred too much to the builder.

My advice would be to halt all HTB applications and contract signing until it is debated and legislated in the dail.

Conrad83

Does anyone know when it is due to be passed/raised in the Dail? Is it this week?

Rock77

Conrad83 wrote: »

Does anyone know when it is due to be passed/raised in the Dail? Is it this week?

Think it’s 2moro

Paremon2

Conrad83 wrote: »

Does anyone know when it is due to be passed/raised in the Dail? Is it this week?

The Bill will be debated in Dail Eireann on Wednesday & in the Seanad on Thursday.
Ref: https://www.oireachtas.ie/en/bills/
https://www.oireachtas.ie/en/bills/bill/2020/19/

Therefore it may be Fri or early next week before we have an official response/clarity from Darragh O'Brien or Revenue on eligibility.

Duke of Url

From Revenue MY Enquiries

Re-Query

Dear Duke of Url,

Amendments to the Help to Buy scheme were announced as part of the Governments July Jobs Stimulus Plan on 24 July 2020. The amendments, along with a number of other fiscal measures, have been set out in Section 8 of the Financial Provisions (Covid-19) (No.2) Bill 2020 (https://data.oireachtas.ie/ie/oireachtas/bill/2020/19/eng/initiated/b1920d.pdf).

Please note that, in the Bill, it is the date the applicant has entered into contract to purchase a property (if purchasing), or the date the applicant has drawn down the first part of the mortgage (if self-building), and not the date an application or a claim is made, that affects eligibility for the increased refund.

However, the Bill must pass through the various stages in the Oireachtas before it can be enacted, and it may be amended before it becomes law.

Revenue are not in a position to provide any additional information on Finance Bill items until such a time as the Finance Bill is enacted in order to respect this process.

Kind Regards,

On Behalf of J. Hennessy
Inspector of Taxes

Jen Pigs Fly

GingerLily wrote: »

If you didn't have the amount paid in tax you didn't 'qualify' for that amount.

If we gave everyone the money regardless of contribution you'd have a much much larger group of people trying to buy these houses including people returning home from abroad who've not taxes here in a while or ever (non residents too would qualify, that could get messy).

Maybe it's because we qualified for our maximum HTB, but I agree with the rule to keep it a rebate and not 'free money'.

I know how HTB works, I’m just making the point that we would have gotten €17,500 if we paid enough tax, but as we didn’t we were restricted. I know how credit restriction to tax paid works.

My point is, houses are now going up by €10k in some instances, so in my position and many others position, we gain no benefit from the extra HTB rebate, but also have to try to scrap together another €10k.

They should up the rebate, sure, but should have developed some sort of proviso that prices do not rise to reflect this.

gandalfio

Why is the rebate only allowed be offset against new builds only? What's the rationale for this?

dalex15

gandalfio wrote: »

Why is the rebate only allowed be offset against new builds only? What's the rationale for this?

Probably because there’s a shortage of houses and that’s one way to stimulate developers?

awec

gandalfio wrote: »

Why is the rebate only allowed be offset against new builds only? What's the rationale for this?

The whole point of the rebate is to encourage developers to keep building.

gandalfio

Doesn't it inflate new house prices? And I'd imagine many people are in the position where they qualify for a substantial rebate, but still can't afford a new build and thus can't avail of the rebate.

Creamy Goodness

gandalfio wrote: »

Doesn't it inflate new house prices? And I'd imagine many people are in the position where they qualify for a substantial rebate, but still can't afford a new build and thus can't avail of the rebate.

Yes, but where does that money go? Before HTB builders got X for a house, now they can potentially get X + 30k it’s quite lucrative for them and should entice developers to build more so there’s more housing to home more people now and increase housing stock in future. If you incentivise sale of second hand homes you don’t get this.

In 2018 (only figure I can see), 18,000 new builds were built, assume all were bought and all availed of HTB (won’t be true as some buyers will not be eligible) but that’s 18,000 family units in new homes that:
a) didn’t have a house before
b) have left another house in which someone else can move into.

gandalfio

Creamy Goodness wrote: »

Yes, but where does that money go? Before HTB builders got X for a house, now they can potentially get X + 30k it’s quite lucrative for them and should entice developers to build more so there’s more housing to home more people now and increase housing stock in future. If you incentivise sale of second hand homes you don’t get this.

In 2018 (only figure I can see), 18,000 new builds were built, assume all were bought and all availed of HTB (won’t be true as some buyers will not be eligible) but that’s 18,000 family units in new homes that:
a) didn’t have a house before
b) have left another house in which someone else can move into.

I see. But not all first time buyers that are ELIGIBLE for HTB qualify for mortgages big enough to buy new builds with. Even with the extra capital from the HTB.