Help to Buy (HTB) Incentive

DeasunK · 03-01-2017 11:49PM #1

The revenue.ie Help to Buy Incentive Application asks:

Please select the years you wish to use as part of your Help to Buy refund calculation. You must select at least one year and can select up to a maximum of four.

How many years should I select? How does it affect the refund calculation?

ShogunWarrior · 06-01-2017 04:16PM

Assuming you're a PAYE taxpayer you can apply for the years as you'd like and applying for a year has two implications:

Your PAYE/DIRT tax paid for that year will be eligible for the rebate;
You'll have to file Form 12 (eForm 12) returns for that year.

So, let's say you think 5% of your property value would be €15,000 you'd want to make sure you select enough years that the total paid adds up to at least €15,000, otherwise you're missing out. Imagine your tax paid looked like this:

2015: €10,000 PAYE income tax
2014: €2,000 PAYE income tax
2013: €5,000 PAYE income tax
2012: €3,000 PAYE income tax

You'd probably choose years 2015 and 2013 (which sum to €15k) and you'd have to file Form 12 for 2015 and 2014. You could choose 2015, 2014, 2012 if you wanted but you'd have to file three Form 12. I assume the reason Revenue let you select the years is so that you've control over which Form 12 returns you've to file.

ELBAOS · 10-01-2017 01:35PM

Think the 4 years they apply to are 2013-2016, thats what revenue told me this morn anyway, and if you need to use 2016 as a year to claim you cannot do so until you receive P60 in Feb, my understanding anyway

deco72 · 10-01-2017 04:43PM

Hi
Does anyone know if you can cancel an application and submit a different one? I put in for 4yrs but would like to change to only 3yrs.
Thanks

Max2014 · 10-01-2017 07:30PM

Hi, I am looking for information on the Help to Buy scheme.
We are building a new house and trying to avail of the grant however I am confused about the 70% valuation.
Our situation is that we are taking €220,000 of a mortgage along with savings of €50k which is totalling the cost of the build to €270k. We were lucky to inherit a site also.
The problem is our house is more than likely going to be valued at €400,000 plus so therefore we would need to be taking a mortgage of €280,000.
Is anyone else in this predicament or is there a way around it? Seems a bit ridiculous that it's 70% when it's obvious that when you build a new house on a site it's going to be worth a lot more than the actual cost of building it.
Any help on this would be greatly appreciated.

amrt · 12-01-2017 11:24AM

I am in the same both we were gifted a site and our house is valued at €260,000 so 70% of this is €182,000 but we took out our mortgage for €180,000. Are you self building? I know our mortgage is €180,000 but realistically we are not 100 % sure how much how our house will actually cost us yet we are hoping not to even draw down all of our mortgage so can you submit it now or do you have to wait until your final mortgage drawdown. I have been trying to get some information to see if there is any way around it too (as we are only out by 2k) but no one seems to know anything about it or if why they won't take your savings into account it's very frustrating

a_noodle_jenny · 12-01-2017 02:18PM

IMO it's all a bit vague on the revenue.ie site
T&Cs have changed from January 1st for new applications

I would advise calling them directly - as we are all speculating. The value of the house is not based on how much is spent, again its very subjective. It would be an awful kick in the teeth to find out you may have missed out on €15k due to a minor % adjustment that potentially could be made now.

I feel that the T&Cs are creating a bit of a bubble for buyers / self builders and contractors but if we get money back I'll gladly accept... our house value is lower than average house prices in Ireland due to rural location so we might get €8-9k back, hard to say and again we are seeking clarification on this at the moment

tobdom · 13-01-2017 02:43PM

Max2014 wrote: »

Hi, I am looking for information on the Help to Buy scheme.
We are building a new house and trying to avail of the grant however I am confused about the 70% valuation.
Our situation is that we are taking €220,000 of a mortgage along with savings of €50k which is totalling the cost of the build to €270k. We were lucky to inherit a site also.
The problem is our house is more than likely going to be valued at €400,000 plus so therefore we would need to be taking a mortgage of €280,000.
Is anyone else in this predicament or is there a way around it? Seems a bit ridiculous that it's 70% when it's obvious that when you build a new house on a site it's going to be worth a lot more than the actual cost of building it.
Any help on this would be greatly appreciated.

My understanding is, and I think this is right, It's not 70% of the 'valuation' of the house (once finished), it's the cost to build (or buy if you're not building).

So whatever the costing is for your house is what its based off. So 270k of which 50k is your deposit, so your LTV is ~82.5%.

Although the 5% rebate/grant of the HTB scheme, as far as I understand it, is counted as part of your deposit. So 5% (assuming you qualify & get the full amount) of 270k is 13.5k, which would actually give you a supposed deposit of 63.5k. That would make your LTV 76.5%, so still comfortably above the 70% threshold.

I'm open to correction on the above, but that's my understanding of it to-date.....

amrt · 13-01-2017 03:22PM

So can your savings be used as part of your loan to value? If so how do you prove this to the revenue do you need to show bank statements or can the bank give you some documents. I thought the figure was only based on the valuation of your house that's on the mortgage documentation. Also does anyone know do you need to go through your solicitor to claim if you are self building I read somewhere that in the case of a self build it's your solicitor that it goes through but yet again no real information its all very vague

B-D-P-- · 13-01-2017 03:24PM

Just wondering,
Why not ask your bank manager, He/She should be able to help with questions, thats their job.

Would not be impressed if the manager wasnt willing to help with this.

amrt · 13-01-2017 03:27PM

I know I have done just waiting on a reply but just trying to do a bit of research in the meantime

Reati · 13-01-2017 03:50PM

amrt wrote: »

I know I have done just waiting on a reply but just trying to do a bit of research in the meantime

Let us know what you hear!

mjp · 15-01-2017 01:16AM

amrt wrote:

I am in the same both we were gifted a site and our house is valued at â‚¬260,000 so 70% of this is â‚¬182,000 but we took out our mortgage for â‚¬180,000. Are you self building? I know our mortgage is â‚¬180,000 but realistically we are not 100 % sure how much how our house will actually cost us yet we are hoping not to even draw down all of our mortgage so can you submit it now or do you have to wait until your final mortgage drawdown. I have been trying to get some information to see if there is any way around it too (as we are only out by 2k) but no one seems to know anything about it or if why they won't take your savings into account it's very frustrating

You say your house is valued at 260k. If so why not go back to your bank and ask to increase your mortgage to 185k to meet the 70% LTV ratio. Otherwise speak to auctioneer who valued your house to see if he could reduce the value to 255k and if he doesn't go to another valuer on your banks approved list who will do that for you.

I originally got my mortgage for 230k in September but reapplied for 250k and after I got approval I got an auctioneer to value my house at 345k to maximise my return on scheme to get 17,250 back from revenue. Auctioneer had no issue in doing this as on my first mortgage approval the max house could be valued at was 328k which would have been more than 1k less back from revenue.

a_noodle_jenny · 15-01-2017 02:47AM

We are in a similar situation to mjp - don't know if we will get The grant but your post has assuaged my fears somewhat. We would not get as much back as our home is lower in value

Valuation is very subjective - I also would say that the lesser of two evils is to work out what one needs house to be valued at for your mortgage to hit the 70% rate... ours is 71.8% but it was just a fluke that our approved mortgage worked out... we just thought we could draw down what we needed but get approval for the big anount just in case

But now we have gone high spec on our insulation our contingency fund is dwindling so I think we will need the full mortgage... which works Well for this HTB scheme for us...
taking out a bigger mortgage is a false economy so sit down and think it through.

meouldstock · 15-01-2017 11:10AM

Hi,

This is my first time looking at this forum so apologies if this has been covered in a previous thread.

My wife and I don't own any properties. We're planning to rebuild a house that's on my parent's land and use this as our primary residence. This house hasn't been lived in for 25 years and it needs to be completely gutted, renovated and extended. The only thing that could survive from the house are some of the walls - the roof, floors and everything else would all have to be replaced.

Would this scenario be covered under the new Help to Buy deposit scheme? I'm not sure if this would be considered as a self build?

Thanks,
Meouldstock.

mike_2009 · 15-01-2017 12:15PM

Good question,
As it's a knock and build I would expect it would be covered by the scheme but to be sure I'd put a call into the Revenue and get it in writing if you can! Just make sure you'll be getting financing with a 70% LTV minimum and a HTB registered main contractor also.

Best of Luck!

ascophyllum · 15-01-2017 01:44PM

Any idea if for a self-build in the country, will the builder have to be approved by revenue, their info on revenue.ie states ''Ensure your Contractor is a ‘Qualifying Contractor’ before you start the application process.''

What if you don't have a main contractor? If you're sub contracting the work yourself, i.e. hiring a brick layer, carpenter, electrician yourself, plenty do it this way. The current pdf list of qualifying contractors only has 5 companies on it.

Not enough info on revenue.ie

Reati · 15-01-2017 04:28PM

a_noodle_jenny wrote: »

Taking out a bigger mortgage is a false economy so sit down and think it through.

Very much so - I'd have to take our more than I'd get back so it makes no sense for me to borrow more just to qualify. Funny thing is plenty of people will do this... and think they are winning.

mjp · 15-01-2017 06:22PM

You can apply for the bigger mortgage but you dont have to drawdown the full amount only what you spend. You will receive revenue payment after 1st stage drawdown hence why increased the amount to maximise the money back.

a_noodle_jenny · 17-01-2017 02:27PM

All I'd say is be careful, loopholes that have been overlooked by these type of schemes can be quickly shut down, particularly when discussed in a public forum such as here.

It's good if one can get something back - the bank will win regardless but it just happens that our LTV will be 71%
If people do too much fiddling with valuations and mortgage applications HTB incentive will be revised or pulled altogether so as said previously sit down and work out your figures to weigh up best option for your situation

sportzstar · 18-01-2017 10:24AM

I don't suppose there's any way that they can make a special case regarding the date?

We rushed through the contracts for the end of May to try and get moved in quickly but we would definitely have waited until July 19 is we'd any idea that it was coming in.

It sicken the **** out of me that Developers are going to make a killing on this and we miss out by six weeks after scrimping and saving for years.

GraceKav · 26-01-2017 10:57PM

Re the qualifying contractor rule, there are only 20 registered to date as per the Revenue.ie site, link below:

http://www.revenue.ie/en/tax/it/reliefs/htb/index.html#contractors

Going to be tendering in a few months and just getting my head around the process to make sure we hit anything we have to to get the relief. With this low amount of builders signed up, unless I'm reading it incorrectly, I imagine the list will only get longer as people refuse to go with builders who are not registered. Hoping this doesn't impact trying to find a builder later. List was already narrowed down to builders with experience of building to passive standards but now its also narrowed by registered builders and based on this list, could cause problems.

Also, our solicitor is needed to verify details during the application process. Agreed fixed rate previously which was to cover from start to finish. Assuming/hoping that any extra work for the HTB scheme will just be added in with the rest free of charge.

NeirBot · 28-01-2017 07:19AM

GraceKav wrote: »

Re the qualifying contractor rule, there are only 20 registered to date as per the Revenue.ie site, link below:

http://www.revenue.ie/en/tax/it/reliefs/htb/index.html#contractors

Going to be tendering in a few months and just getting my head around the process to make sure we hit anything we have to to get the relief. With this low amount of builders signed up, unless I'm reading it incorrectly, I imagine the list will only get longer as people refuse to go with builders who are not registered. Hoping this doesn't impact trying to find a builder later. List was already narrowed down to builders with experience of building to passive standards but now its also narrowed by registered builders and based on this list, could cause problems.

Also, our solicitor is needed to verify details during the application process. Agreed fixed rate previously which was to cover from start to finish. Assuming/hoping that any extra work for the HTB scheme will just be added in with the rest free of charge.

From a quick look the "Information applicants need to make a claim" section it looks to me that self builds might not need a registered contractor from the list. just picking out a few of the info requirements:

- details of the Developer/Contractor (if property purchased)
- details of the Solicitor (if a self-build)

Once the claim is submitted, as part of the claim stage, before the refund will be paid the details will need to be verified by:

- the Developer/Contractor in the case of the purchase of a new build, or,
- a Solicitor, acting on your behalf, in the case of a self-build

To me it looks that the Developer/Contractor info is only needed if you are purchasing the house from them.. but I would get onto Revenue to clarify this of course.

I am starting to build my house next month so if I am wrong and the contractor needs to be registered for this then I'm gonna have to get going on convincing him that registering is a good idea!!

ustari · 30-01-2017 03:13PM

Just spoke to revenue there on the subject.

The lady I was speaking to had an understanding that we do NOT need our builder to be on the "qualifying contractor" list. That would apply more to those purchase a new house in an estate for example. I am awaiting a call to confirm this.

Also, it mentions in the documentation that
"Self-Builds after 1 January 2017 – the tax refund will be paid to the qualifying loan bank account."

Does anyone know what exactly happens with this money when it is "paid to the qualifying loan bank account"?
I am awaiting a call to let me know about this also.

My bank account is with a different bank than our mortgage will be. We would really prefer the access to the money there and then ourselves as opposed to it "coming off the top" of the overall mortgage amount. Even if it had to sit in the account and could be used for our future monthly repayments that would be ok. Straight up cash for us to do with what we want is the real preference of course though!

tobdom · 30-01-2017 05:29PM

There seems to be some conflicting information on this and the 'official line' on it seems to have changed on Revenue's site. I saw it previously mentioned on their site that for self-builds, the 'refund'/grant would be paid directly to the contractor/builder......

Now I see this on the site: http://www.revenue.ie/en/tax/it/reliefs/htb/htb-applicant-guide.html
"For a first-time buyer who self-builds a new residential property between 1 January 2017 and 31 December 2019 the information provided at application stage will be verified by your Solicitor. The refund will be paid to the mortgage institution."

So perhaps the above (new info) aligns with what you found out, ustari, and that the HTB refund is just paid directly to the mortgage provider?.... But surely that would have to then be discounted straight off the capital without any applicable interest?

ustari · 30-01-2017 05:41PM

It all seems to be a mess to be honest.

After getting a very disappointing call back from revenue just now informing me that we will not be applicable for any relief as we were gifted the site and did not pay a deposit. It is only applicable off the deposit according to this lady who asked someone else in the revenue office on the matter for me.

Very frustrating as I don't see how people with land that are building would have a deposit in most instances?

amrt · 30-01-2017 05:48PM

So if you are gifted a site you will not qualify? I was also gifted a site so I am obviously in the same situation. Are you self building ustari? If you ask me no one seems to have any clue what's going on with this refund in the case of a self build.

ustari · 30-01-2017 05:52PM

According to this phone call, no, if you did not pay a deposit you do not apply/qualify.

I was gifted land and because the land is used as the deposit in the bank eyes I didn't pay any deposit in the revenue's eyes.

Very frustrating as this would be the case for non gifted people with land also it seems from my understanding and the phonecall. I know people will say we don't have to save the deposit so shouldn't qualify by rights but my understanding and reading of the documentation is that we would.

We are using a builder but believe it counts as a "self build" in the eyes of revenue in their documents in regards to the HTB scheme.

tobdom · 31-01-2017 10:16AM

"Self-build" would cover any situation where you're building a 'one-off' house on a plot of land, whether you are actually building it yourself or having a builder/contractor do it for you.

So in your situation ustari, the fact you don't qualify is more down to not having a (cash) deposit, rather than the fact that you were gifted the site? We were also gifted our site, but we do also have a cash deposit, so I'm working off the assumption that we will qualify for the HTB scheme.....

ustari · 31-01-2017 12:06PM

Well we went with AIB who did not require a deposit despite us having some money saved. BOI and PTSB were looking for a deposit so maybe if you are going with one of those banks you could be ok.

SalaKash · 02-02-2017 01:22PM

Hi Folks
Anyone in a situation where contract is signed by us in Nov 2016 and required 10% deposit paid to the Builder however Builder didn't return the signed copy from their side and expected in next week time. I am wondering if we qualify as a retrospective applicant or not? thanks a lot

Help to Buy (HTB) Incentive

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