First Time House Buyer Solicitors
Purchasing a home for the first time can sometimes be daunting and while there are many different tasks to complete throughout the process, you will be guided step by step by your solicitor who will offer clear explanations for each of the various steps involved. Your convenience is important to us, and we aim to minimise the amount of time you have to spend on the process. We offer video calls to save you from travelling to meet us and you can meet us at times convenient to you. When documents need to be signed, we can come to meet you at your home.
Who Qualifies as a First Time Buyer?
A first-time buyer (FTB) is an individual who has never before, either by themselves or with others, purchased a house, apartment, or a site to build a home, in Ireland or abroad. FTBs only require a deposit of 10 per cent of a property’s purchase price, and they can take advantage of the Help to Buy rebate if they purchase or build a new home, it does not apply to second hand properties. This scheme is designed to aid FTBs in obtaining their deposit by providing a refund on income tax and deposit interest retention tax. The Help to Buy (HTB) incentive allows you to claim back tax that you have paid in Ireland over the last four years. A temporary enhancement to the existing HTB scheme for the remainder of 2020 was announced in the July Stimulus plan and extended to the end of 2021. The amount that you can claim is the lesser of:
- 10% of the price of a new home. For self-builds this is 10% of the completion value of the property.
- The amount of Income Tax and Deposit Interest Retention Tax (DIRT) you have paid in the four years before you buy or build.
The maximum payment is €30,000 per property.
A mortgage to the value of up to 3.5 times your annual income is available for FTBs. For joint applicants, this figure is based on a combined gross income. As mentioned, FTBs can borrow up to 90 per cent of the property value, therefore only requiring a 10 per cent deposit. This 90 per cent is the amount you must repay with your long-term monthly repayments. For example, if you can afford to purchase a house for €250,000, your mortgage provider will can lend you up to €225,000. You will be required to pay the remaining €25,000 yourself in the form of your deposit.
Although FTBs do enjoy the benefits provided as part of the Help to Buy rebate incentive scheme, as well as lower deposit requirements, in order to secure a FTB mortgage, the key principles of mortgage approval still apply.
An important tip for FTBs is saving. Save as much as you can every month, as far in advance of buying your home as you can. This allows you to prepare for paying off your mortgage and bills. This is also useful for renovations as it’s always best to prepare for the unexpected. It is advisable that you always have some money put away for any surprises your renovations might throw at you.
Quick response times, utilised digital communications where possible and provided a simple and easy to understand explanation of all requirements, costs and updates on the process. Made our first home purchase as straightforward and stress free as possible, would certainly return and definitely recommend.
As a client, I felt that the utmost convenience was always provided by SOS. Communication was very good. Correspondence was timely and relevant. A personable and extremely knowledgeable approach was provided by James in a sincere and professional manner. Dealing with SOS ensured that the (initially) daunting task of navigating the bureaucracy/stress of a sale was greatly decreased. Would 100% recommend this firm.
Great support to us in buying our first home. The best thing was the efficiency of James’ service, he was always at the end of the phone for us and was so easy to talk too and we always felt comfortable asking any questions we had. James kept the process moving as he was in constant contact with our builder’s solicitor. Response times were excellent, and James was always very clear and reassuring when answering our questions. So easy to deal with, great communication by email, phone and WhatsApp. We’ll certainly be in touch again should we need any legal support or advice.
What is the Help to Buy Scheme?
The Help to Buy (HTB) incentive is a scheme for first-time property buyers. It will help you with the deposit you need to buy or build a new house or apartment. You must buy or build the property to live in as your home. It will give you a refund of Income Tax and Deposit Interest Retention Tax (DIRT) that you paid in Ireland (minus any refunds you have already claimed). The refund will be from the four years prior to making the application.
An enhanced HTB relief has been extended to 31 December 2021 and provides that where applicants satisfy certain conditions, increased relief is available up to a maximum of €30,000. To avail, you must:
- be a first-time buyer
- buy or build a new property between 19 July 2016 and 31 December 2021
- live in the property as your main home for five years after you buy or build it
- be tax compliant, if you are self assessed you must also have tax clearance.
You must not have previously bought or built a house or apartment, either on your own or jointly with any other person. If you are buying or building the new property with other people, they must also be first-time buyers. If you have inherited or been gifted a property it will not affect your eligibility.
If you are buying the property, you must have signed a contract to buy that property on or after 19 July 2016. If you are self-building, you must have drawn down the first part of the mortgage on or after that date.
The contractor you are purchasing your home from must be approved by Revenue and the property that you build or buy must be:
- your home
- newly built with the construction subject to Value Added Tax (VAT) in Ireland.
It must never have been used, or have been suitable to use, as a residential home. If the property was non-residential, but has been converted for residential use, it may qualify for HTB. If you buy or build the property as an investment, it does not qualify for HTB.
For self-built property, the purchase value is the approved valuation by the lender at the time that you took out the mortgage. If you bought the property between 19 July 2016 and 31 December 2016, the purchase price must be €600,000 or less. If you bought it after 1 January 2017, it must be €500,000 or less.
You must take out your mortgage on the property with a qualifying lender. This loan must be used only for buying or building the property. The loan must be at least 70% of the purchase value of the property.
The amount that you can claim is the lesser of:
- €20,000 (increased to €30,000 for enhanced relief to the end of 2021)
- 5% of the purchase price of a new home. For self-builds this is 5% of the approved valuation of the property. This has been increased to 10% for those qualifying for enhanced relief.
- the amount of Income Tax and Deposit Interest Retention Tax (DIRT) you have paid for the four years before you make your application.
The maximum payment is €20,000 per property (increased to €30,000 for enhanced relief).
Universal Social Charge (USC) or Pay Related Social Insurance (PRSI) are not taken into account when calculating how much you can claim.
If you bought or built the property between 19 July 2016 and 31 December 2016, the refund will be paid directly to you. If you buy a new build after 1 January 2017, the refund will be paid to the contractor. If you self-build the property after 1 January 2017, the refund will be paid to a bank account you hold with your loan provider.
You may have signed your contract to buy a new build or draw down the first part of your mortgage for a self build between 1 January and 31 March 2021. If so, you may select either the:
- year of purchase to be the actual year you bought or built your home
- previous year provided you make your application before 31 May 2021.
This will allow you to select the four year period which is of most benefit to you.
You may select 2020 as a year in your HTB application once you:
- have submitted your annual Income Tax Return for that year
- have received your Statement of Liability from Revenue with respect to that year.
Revenue can claw back refunds if:
- you were not entitled to the refund
- you do not live in the property for a minimum of five years
- you did not finish the process to buy the property
- you did not finish building the property.
First Time House Buyer Solicitors
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