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

PedroDublin

Hello everyone, what do you think the purchase date mean on the new help to buy scheme? Contracts signed by buyers, contracts received, mortgage withdrawal, closing date..... I have seen different things on different news

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bleary

Itchap3 wrote: »

I know of one person personally who signed contracts in May and getting keys next month who is now devastated as he had planned to use the money to furnish his house. I'm sure he's not the only one who had this idea.

He signed and agreed to buy a property before this was even flagged
He had no idea how much any scheme flagged in July would be worth
He had no idea what the conditions were
How is he devastated that some free money he was not aware of until yesterday is now not coming down the tracks.
Presumably he had some plan in May how he was going to furnish the house he agreed to buy?
I would have much more sympathy for someone who had bought a new property with a deposit greater than 20% , they are being penalised for fiscal responsibility.

P.S He needs to learn the real meaning of devastation.

Michael D Not Higgins

Itchap3 wrote: »

Strange how they waited until today to announce pricing though.

Plenty of other developments in the last few months have also launched the pricing for their extended phases with higher prices. It's easy to point at the next development to announce prices and say, "see?"

Itchap3

Strange how they waited until today to announce pricing though.

ted1

Itchap3 wrote: »

Here's a real example of how this system is not going to work.

A new development I'm familiar with in Dublin. Prices in the last phase (6 months ago) were 410-430 for a 3 bed house. A new phase launching this weekend and prices were just released today (conveniently). 3 beds now from 425-450. So you can forget about it being a scheme to help first time buyers. It's an incentive to developers to build more houses and increase supply. Nothing more. It'll help first time buyers get a house in the sense that it'll help them overcome the deposit requirements, however they won't be 20,000 better off as some seem to think.

That's how the system has always worked , the 2nd and 3rd phases always go up

REFLINE1

Itchap3 wrote: »

Here's a real example of how this system is not going to work.

A new development I'm familiar with in Dublin. Prices in the last phase (6 months ago) were 410-430 for a 3 bed house. A new phase launching this weekend and prices were just released today (conveniently). 3 beds now from 425-450. So you can forget about it being a scheme to help first time buyers. It's an incentive to developers to build more houses and increase supply. Nothing more. It'll help first time buyers get a house in the sense that it'll help them overcome the deposit requirements, however they won't be 20,000 better off as some seem to think.

which development is this you refer to?

68 lost souls

Itchap3 wrote: »

Here's a real example of how this system is not going to work.

A new development I'm familiar with in Dublin. Prices in the last phase (6 months ago) were 410-430 for a 3 bed house. A new phase launching this weekend and prices were just released today (conveniently). 3 beds now from 425-450. So you can forget about it being a scheme to help first time buyers. It's an incentive to developers to build more houses and increase supply. Nothing more. It'll help first time buyers get a house in the sense that it'll help them overcome the deposit requirements, however they won't be 20,000 better off as some seem to think.

That's not down to this that is just how new developments work.

Development we bought in was 332,500 for 3 bed in March in Phase 1 and Jumped to 360,000 in phase two in start of September

Itchap3

I know of one person personally who signed contracts in May and getting keys next month who is now devastated as he had planned to use the money to furnish his house. I'm sure he's not the only one who had this idea.

awec

Itchap3 wrote: »

Here's a real example of how this system is not going to work.

A new development I'm familiar with in Dublin. Prices in the last phase (6 months ago) were 410-430 for a 3 bed house. A new phase launching this weekend and prices were just released today (conveniently). 3 beds now from 425-450. So you can forget about it being a scheme to help first time buyers. It's an incentive to developers to build more houses and increase supply. Nothing more. It'll help first time buyers get a house in the sense that it'll help them overcome the deposit requirements, however they won't be 20,000 better off as some seem to think.

Nobody thinks they will be 20 grand better off. That's not the point.

The point is exactly to get people over the deposit requirements and to make it more financially worthwhile for builders. Not to make people capable of affording houses they wouldn't otherwise able to afford.

Itchap3

Here's a real example of how this system is not going to work.

A new development I'm familiar with in Dublin. Prices in the last phase (6 months ago) were 410-430 for a 3 bed house. A new phase launching this weekend and prices were just released today (conveniently). 3 beds now from 425-450. So you can forget about it being a scheme to help first time buyers. It's an incentive to developers to build more houses and increase supply. Nothing more. It'll help first time buyers get a house in the sense that it'll help them overcome the deposit requirements, however they won't be 20,000 better off as some seem to think.

Michael D Not Higgins

BailMeOut wrote: »

does first time buyer mean first time buyer in Ireland or anywhere. I bought a home a long time ago in USA while living there so would I qualify?

Probably not, and not declaring it during the mortgage application could amount to tax fraud. There's some ambiguity on the definition of first time buyer but it always means worldwide.

For example, the mortgage lending rules consider a first time buyer as one who has not had a mortgage before. Therefore, if you bought a house outright or inherited without a mortgage, you still qualify.

The Revenue definition sometimes includes people who bought a house during a marriage which has subsequently dissolved and they have no legal interest in the house anymore.

This scheme says you're not a first time buyer if you have purchased a house before. I expect the Finance Bill will be more thorough in the definitions.

BailMeOut

does first time buyer mean first time buyer in Ireland or anywhere. I bought a home a long time ago in USA while living there so would I qualify?

Michael D Not Higgins

Shelga wrote: »

This is a load of s**t for people like me who were forced to emigrate, there is zero incentive to move home really.

You can't please everyone. The backlash after Mary Mitchell O'Connor suggested there should be a tax incentive to get emigrés to move home on boards and elsewhere was telling. The usual response was "how come people who left the country get the benefit while I toiled away through the additional taxes and burden of the recession?"

I think the best way they could have done it was offer a tax credit for the subsequent 4 years. That gives people a drip feed of the rebate which doesn't affect the purchase price and also benefits returning people buying their first home. But that doesn't help the construction industry.

Really, this is the only palatable way to give the construction industry a grant to kickstart some additional development.

athtrasna

Shelga wrote: »

This is a load of s**t for people like me who were forced to emigrate, there is zero incentive to move home really. Why couldn't they just top up savings via a Help To Buy scheme like in UK.

Although I don't even agree with those, ultimately government interference just seems to artificially inflate prices.

Sigh. Will I ever get to move home and have my own place. :-/

It's not designed to incentivise migration, it's apparently designed to encourage development.

ted1

Shelga wrote: »

This is a load of s**t for people like me who were forced to emigrate, there is zero incentive to move home really. Why couldn't they just top up savings via a Help To Buy scheme like in UK.

Although I don't even agree with those, ultimately government interference just seems to artificially inflate prices.

Sigh. Will I ever get to move home and have my own place. :-/

People like you who emigrated had it easy, it's the people that stayed behind had to pick up the pieces. USC, water charges, increase charges across the board , scaled back public services etc.

If you are not part of the system, how can you expect help from the system.

Shedite27

Shelga wrote: »

This is a load of s**t for people like me who were forced to emigrate, there is zero incentive to move home really. Why couldn't they just too up savings via a Help To Buy scheme like in UK.

Although I don't even agree with those, ultimately government interference just seems to artificially inflate prices.

Sigh. Will I ever get to move home and have my own place. -/

There's enough people who stayed in Ireland, went through job cuts, wage freezes, rent hikes and tax increases that need to be helped out first. This does that.

We'll get around to your welcome home invite any day now.

Shelga

This is a load of s**t for people like me who were forced to emigrate, there is zero incentive to move home really. Why couldn't they just top up savings via a Help To Buy scheme like in UK.

Although I don't even agree with those, ultimately government interference just seems to artificially inflate prices.

Sigh. Will I ever get to move home and have my own place. :-/

Graham

psinno wrote: »

Assuming you haven't finalised your mortgage you get to borrow the extra 5% at little to no cost to you. *
You might need to too since most other people will have 5% more to spend.

* interest rate might be higher and complicate the calculation

* mortgage provider may not agree larger loan.

Carlos Orange

Graham wrote: »

You get nothing.

Assuming you haven't finalised your mortgage you get to borrow the extra 5% at little to no cost to you. *
You might need to too since most other people will have 5% more to spend.

* interest rate might be higher and complicate the calculation

Graham

schinkowski wrote: »

Does anyone know how strict they would be with the 80% LTV? ?

I would expect 80% means 80%.

schinkowski wrote: »

What if you get a 75% or 79% LTV?

You get nothing.

Graham

lawred2 wrote: »

I do not for the life of me understand why this is backdated..

Those people who have closed since Jul 2016 did so under the understanding the current rules and framework. Now they are to be handed upto 20k..

I get it going forward but retrospective.. I do not get how that is supposed to stimulate demand.

If it hadn't been backdated, there would have been an immediate halt on new build sales between the date of the proposal and the budget.

By announcing that any benefits would apply retrospectively from the proposal date, new-build sales continued as normal.

schinkowski

Does anyone know how strict they would be with the 80% LTV? The official documentation doesn't say it. What if you get a 75% or 79% LTV?

68 lost souls

Shelga wrote: »

Am I right in saying that as someone who has lived in the UK since 2011 (recession graduate), but really want to move home early next year, I will see F all benefit from this scheme as I haven't been paying income tax in Ireland?

If it only applies to new builds anyway, surely hardly anyone is going to benefit?? Apologies if these questions have been answered already, in a bit of a rush on my phone.

Yes you are right about living abroad ant not paying taxes.

Lots of people are buying new homes it will benefit them and free up the old homes for the rental market. In one area of Dublin there have been 3 multiunit developments on sale this year consisting of several hundred units. Possibly close to 500-600? Thats just in one stretch of road.

Shelga

Am I right in saying that as someone who has lived in the UK since 2011 (recession graduate), but really want to move home early next year, I will see F all benefit from this scheme as I haven't been paying income tax in Ireland?

If it only applies to new builds anyway, surely hardly anyone is going to benefit?? Apologies if these questions have been answered already, in a bit of a rush on my phone.

Michael D Not Higgins

Stheno wrote: »

An individual who is married to someone else earning 36k who is also earning the same, will end up paying 4.5k in PAYE every year, which means that they will have paid 18k in the previous four years, so thats the limit they can claim back

http://download.pwc.com/ie/budget-2016/result.html?status=3&grosssalary=36000&spousesalary=0&salary2=0&age=&salary3=0&prsicategory=1&pensions=&investments=&otherincome=&companycarvalue=&mileage=0&healthbik=&healthadult=0&healthchild=0&clubsbik=&otherbik=&prefloanmortgage=N&mortgagerelief=N&firsttimebuyer=N&loaninterestpaid=&loaninterestrate=&propertyband=0&localauth=0&Submit=Calculate+My+Tax

That's a couple who are married and earning 72k

You need to hit 90k for a married couple to qualify for 20k over four years.

Are they not paying 4.5k tax EACH a year and would then be well over the 20k limit for rebate?

Itchap3

I don't understand why people who signed contracts before July 16th are giving out that it's unfair they don't qualify for this.
They signed contracts before this was even announced, so would have not factored this rebate into their plans. It seems people are annoyed they're not getting handed 20,000 which they mistakenly thought they would.

StupidLikeAFox

Anybody know how it will actually work?

In the process of buying a house atm - have the deposit saved and booking deposit down (no contracts signed which means the deal isnt done yet). Do I go ahead and apply for a PAYE refund and get the cash into my hand? Or does the refund somehow go directly to the bank/developer in advance?

EDIT:

awec wrote: »

Depends when you plan on buying.

The scheme opens in January so if you buy before then you'll be claiming the money back retrospectively. If you buy after that you will get the money to use as part of your deposit with the bank.

Ah, this answers my question! Hopefully the builder doesn't pull out here and wait it out for a higher price

cronos

lawred2 wrote: »

Fair point.

Don't announce it then. But then politicians need their photo shoots.

Can also be useful to see if it's a useful approach from people other than those in government. Could be done behind the scenes but would probably end up being leaked anyway. Better to assume it would be leaked and just back date it when it comes to the stage too many people know about it.

lawred2

ted1 wrote: »

lawred2 wrote: »

the details were not announced - only a vague plan. So no - people did not buy knowing the rules and framework.

It would have killed the market if they didn't say if they would back date it.

In the past there was a similar initiative planned and no houses closed between the announcement of a proposed scheme and the date it took affect

Fair point.

Don't announce it then. But then politicians need their photo shoots.

ted1

lawred2 wrote: »

the details were not announced - only a vague plan. So no - people did not buy knowing the rules and framework.

It would have killed the market if they didn't say if they would back date it.

In the past there was a similar initiative planned and no houses closed between the announcement of a proposed scheme and the date it took affect

68 lost souls

lawred2 wrote: »

the details were not announced - only a vague plan. So no - people did not buy knowing the rules and framework.

They were told it would be back dated to then and knew that there would at least be some assistance.