The first draft of the Finance Bill was published on 20th October outlining in detail the measures to be introduced as part of Budget 2017.
Included in the Bill is further detail on the Help to Buy Scheme for First Time Buyers (FTB).
It should be noted that these proposals are in draft format and are subject to change prior to the bill becoming law.
The scheme provides for a refund of income tax (including DIRT) paid over the previous four years. The maximum refund is 5% of the purchase price of a new build or self-build up to a value of €400,000. The maximum refund will also be available for new homes valued between €400,000 and €600,000.
The Bill contains very detailed information on the operation of this regime. Points of note include:
Applicants must take out a mortgage of at least 70% of the purchase price. This is a change from the Budget, which had specified an 80% loan to value ratio was required to be eligible for relief.
Each applicant involved in the purchase must be a FTB.
To claim relief, the FTB must have filed a tax return and paid the tax due for the preceding four years.
Contractors wishing to participate in the incentive will need to be registered with Revenue.
There are two stages to the process of claiming relief, an application and a claims stage. Both stages will be completed online.
There are a number of provisions governing the clawback of the refund in certain circumstances for example, if the FTB does not occupy the home as their sole or main residence for five years, if a self-build home is not completed within two years.
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