Help to Buy (HTB) Scheme

The scheme can be viewed as a reactionary measure to the series of strict mortgage measures put in place in 2015 by the Central Bank as part of its goal to ensure the stability of the financial system and to prevent excess credit being built up within that.

These measures consist of Loan to Value (LTV) limits and Loan to Income (LTI) limits. With respect to first time buyers, there is now a LTV of 90%, with the LTI limit restricting the amount of money a first time buyer can borrow to a maximum of 3.5 times their gross income.


Under the HTB scheme a first-time buyer may claim a refund of income tax and DIRT paid over the previous 4 years. The refund which may be claimed is the lower of the following three amounts:

  • The income tax and DIRT payable and paid by the claimant for the 4 years preceding the year in which the claim is made;
  • 5% of the purchase value of the qualifying residence; or
  • €20,000.

The maximum amount of relief which may be claimed per house is €20,000.

A maximum purchase value of €600,000 applied between 19 July 2016 and 31 December 2016 in order to qualify for the relief. After 1 January 2017, it must cost €500,000 or less in order to qualify for the relief. The loan to value ratio required to claim the HTB incentive is a minimum of 70% of the purchase value of the property.

Individuals must be fully tax compliant and have tax clearance in order to claim the relief. Claimants must also complete a tax return in respect of the 4 years preceding the year in which the claim is being made. Building contractors or developers must also be tax-compliant and ensure that all planning permissions have been complied with.

The property must be occupied for 5 years from the date that it is habitable in order to avoid a clawback of any HTB tax relief claimed. Revenue will also seek to clawback any claim that they view as not meeting the qualifying conditions.

To claim the relief individuals are required to make an application online and provide certain supporting documentation to Revenue.

Once you complete the application, Revenue will confirm the details either with your solicitor (if you are building your own home) or the developer selling the home before paying out any tax refund.

The scheme currently will run until 31 December 2019.

The strict conditions imposed by Revenue can be highlighted from some recent Tax Appeals cases.

Tax Appeals Commissions (TAC) Determinations

The Tax Appeals Commission has recently published determinations concerning the entitlement of individuals to claim tax relief under the HTB scheme. A recent case published in December 2018 concerned an individual who had purchased land in order to construct a family home for herself, her husband and son. The individual stated that this land was purchased principally for its location (adjacent to her parent’s home) and that a pre-existing farmhouse situated on the land which was derelict and uninhabitable would be demolished in order to construct a new build on the land in accordance with the planning permission already obtained.

In May 2017, the individual submitted her claim for HTB relief in respect of the new build. The individual submitted that she relied on the relevant tax legislation together with Revenue’s Tax and Duty Manual which referred to sites containing a derelict house. 

The individual was refused the relief on the basis that she was not a “first time purchaser” on the basis that the pre-existing farmhouse situated on the land at the time the claim was submitted to Revenue constituted a dwelling. The individual appealed as the pre-existing farmhouse on the land was derelict, uninhabitable and was not suitable for use as “a dwelling”. She furnished various supporting documents at the hearing including an architect’s report which provided that the pre-existing farmhouse was not suitable for use as a dwelling due to collapsing walls, mouldy and damp interior and its general state of disuse and disrepair. Revenue did not provide such an architect’s report and were unaware of the condition of the farmhouse as they had not carried out an inspection of the property.

The Appeal Commissioner concluded that based on the uncontested information provided at the hearing by the individual, the building was deemed not suitable for use as a dwelling. The Commissioner determined that the individual had not previously purchased “a dwelling” for the purposes of the definition of “first-time purchasers” in the relevant tax legislation and was therefore entitled to avail of relief under the HTB scheme.

Another case from March 2018 focused on the loan to value (LTV) requirement of not less than 70% which is a qualifying condition in order to claim the relief. In this case the individual ’s LTV ratio was 69.89%. ROS declined to process the individual ’s application as the LTV ratio did not meet the statutory minimum requirement of 70%. The individual argued that the loan offer letter she received from her bank confirmed a LTV ratio of 70%, as the bank had rounded up to the nearest percentage. The individual highlighted the requirement for tax payers to round up figures when completing their tax returns and she noted that it was inconsistent for Revenue not to apply the rounding-up process for taxpayers trying to claim such tax reliefs. Revenue claimed that the rounding up or down of cents to the nearest euro was incomparable to the rounding of percentages.

The Commissioner accepted Revenue’s submission in this regard, noting that the rounding of a percentage may result in a substantial difference depending on the circumstances. The Commissioner concluded that, albeit marginally, the individual s LTV ratio fell short of the required statutory minimum specified in the tax legislation and therefore the individual was not entitled to claim the relief on this occasion.

If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars private client team below:

Staff Member




Alan Murray

Tax Partner

01 449 6480

Siobhán O'Moore

Senior Tax Manager

01 449 6418

February 2019

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