Help to Buy scheme causes confusion over deadlines

Self-builders who want to avail of the Help to Buy scheme as of 2016 must apply by 31 March 2017

The Help to Buy (HTB) scheme, which helps ROI first time buyers put down a deposit towards purchasing or building their home through a tax rebate, is causing some confusion among self-builders who have drawn down the first tranche of their mortgage in the qualifying period last year (19/07/2016 to 31/12/2016).

The HTB relief available depends on the amount of income tax and DIRT you have paid in the four years preceding your application.

So if you claim for 2016, the four qualifying preceding years would be 2012 to 2015. The catch is that even if your self-build started in 2016, you need to claim by March 31, 2017 to have your project qualify as a 2016 project.

“Where you purchased or self-built a property on or after 19 July 2016 and on or before 31 December 2016, you may elect to have your application deemed to have been made in 2016, provided you apply before 31 March 2017,” a Revenue spokesperson told SelfBuild.

“This will allow you to select the four years which are of most benefit. Where an election is made to have an application deemed to have been made in 2016, the four years available for computation of the HTB refund of income tax and DIRT are 2012, 2013, 2014 and 2015.”

“It is important to clarify that if you purchase or self-built a property on or after 19 July 2016 and on or before 31 December 2016, you may still make your HTB application after 31 March 2017. However, in these circumstances, there will be no option to elect to have your application deemed to have been made in 2016. The application will in fact have been made in 2017 and the four years available for computation of the HTB refund of income tax and DIRT are 2013, 2014, 2015 and 2016.”

If you have drawn down the first tranche in the qualifying period of 2016 but only apply in 2018 or 2019, the application will also be deemed to have been made in the 2017 tax year (refund would apply to 2013, 2014, 2015 and 2016).

Statistics as of 24 March 2017 show that 12 per cent of HTB scheme applicants to date were self-builders.

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About Astrid Madsen

Astrid Madsen is the editor of SelfBuild & Improve Your Home magazine. She previously held the same role in an Irish trade publication, before that she worked at the National Standards Authority of Ireland. She graduated with a BA in Urban Studies from Columbia University in New York and holds an MBA from the Instituto de Estudios Bursatiles in Madrid. France of origin, she now lives in Portarlington, County Laois, where she's taken on the task of renovating a listed building! Email astrid.madsen@selfbuild.ie

3 thoughts on “Help to Buy scheme causes confusion over deadlines

  1. Dave

    Hi Astrid,
    Your article says that 12% of HTB scheme applicants were self builders. I understood the contractor needed to be registered with the scheme for you to qualify? How does this work on a self build basis, i.e. where the claimant is technically the contractor?
    Thanks
    Dave

    Reply
    • Astrid Madsen Post author

      Hi Dave, the scheme is open to both those who buy from a developer and self-builders: See below a copy and paste from Revenue’s guide http://www.revenue.ie/en/tax/it/reliefs/htb/index.html :
      Step 3 – Once the claim is submitted, you should advise your Developer/Contractor, or, Solicitor if you are self-building, and provide them with your claim number and the access code already provided. Before any refund is paid, the information you have given will need to be verified by
      – the Developer/Contractor in the case of a new purchase, or
      – a Solicitor, acting on your behalf, in the case of a self-build.

      Reply
    • Astrid Madsen Post author

      Hi again Dave, full reply from the Revenue press office:
      There is no requirement for a self-builder to use a “Qualifying Contractor”. In respect of self-builds, it is the solicitor who is required to verify the claim, not a qualifying contractor.

      Once the first time buyer (FTB) has drawdown the first tranche of the mortgage, a claim can be submitted. Once a claim has been submitted, the FTB will be provided with a claim number. The FTB should then provide their solicitor with their HTB access code and HTB claim number. The solicitor uses these to verify the claim. It is up to the claimant (FTB) to notify their 3rd party verifier (in this case the solicitor) that the claim is ready for verification. Before a solicitor can verify a HTB claim, he or she must first apply to Revenue to be a registered solicitor for the HTB incentive.

      Where the FTB is not a self builder but is purchasing a new property from a contractor, that contractor must be a qualifying contractor.

      Reply

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