Q. We’re first-time buyers hoping to buy or build later this year. We were leaning towards a new house, to take advantage of the various schemes available. However, we’ve been told that we would be better off buying second-hand rather than buying or building a new house. What do you advise?

A. This is a common query and there is no right or wrong answer as it depends on the availability of new builds in your area if buying on-site and build costs in your area if self-building.

Second-hand homes can be excellent value and grants to retrofit them can help buyers make up for the loss of the Help to Buy Grant (HTB).

It has never been more important for first-time buyers to take full advantage of any State financial supports available to them in their quest to buy a home. There is lots of help available, but it’s important to know the rules around each scheme. Here are details about some of the State supports on offer.

Help to Buy (HTB)

HTB allows first-time buyers to get a tax rebate of up to €30,000 or 10 per cent of the purchase price of a newly built home, whichever is less. It is also available on self-builds, with a rebate of up to €30,000 or 10 per cent of the approved valuation of the property available under HTB.

This grant effectively gives qualifying first-time buyers the bulk of a deposit for their home. Furthermore, Budget 2024 amended the HTB scheme so that some people availing themselves of the Local Authority Affordable Purchase Scheme – who have found they do not qualify for HTB under current rules – can access it.

HTB applicants should first check they are eligible for it, and if they do qualify, they should also ensure they meet all the conditions of the scheme.

  1. The scheme is not available to those buying second-hand homes.
  2. You must not have previously purchased or built a house or apartment, either on your own or jointly with any other person.
  3. The purchase value of the property must be €500,000 or less.
  4. To be eligible for the maximum rebate of €30,000, you must have paid at least an equivalent amount of income tax and deposit interest retention tax (DIRT) in the four years prior to making your HTB application. Otherwise, the maximum tax rebate you are entitled to will be reduced.
  5. When building, the grant is based on 70-90 per cent of the final property value and not site and build cost.

Be aware that Revenue can claw back your tax refund if a number of conditions are not met. For example, you must live in the property which you buy through the HTB scheme as your main home for five years.

The First Home Scheme (FHS)

The FHS helps first-time buyers bridge the gap between their mortgage, deposit and the price of a new home.

Under the scheme, the State and participating banks pay up to 30 per cent of the cost of a buyer’s new home in return for a stake in the property. Self-builds also avail themselves of this scheme if certain conditions are met.

1. The scheme cannot be used to purchase the site.

2. The FHS can be used in conjunction with the HTB once you are eligible for both, though the maximum equity stake you can apply for under FHS is 20 per cent of the purchase price, if this is the case.

3. It’s only available for first-time buyers, but an exception may be made for people who have previously bought or built a property with, but since split from, their spouse or partner, as well as those who have sold (or divested of) property as part of a personal insolvency or bankruptcy arrangement, or other legal process as a consequence of insolvency. (fresh start principle)

4. Home must be used as your principal private residence. Furthermore, the purchase price of your property or self-build cost must be equal to or below the property price ceiling for the local authority area in which the property is located. In Dublin city for example, the house price ceiling is €475,000.

Affordable Purchase Scheme

The local authority affordable purchase scheme helps people on moderate incomes to buy new homes at reduced prices. Under this scheme, the local authority takes a percentage stake in your home that covers the discount you are getting off the price

The various forms of State assistance should be at the forefront of your mind when buying your first home.

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