Housing Schemes for First Time Buyers
Purchasing your first home can be a daunting task, especially considering the financial challenges involved. However, the Irish government has implemented several schemes to support first-time buyers in achieving their goal of homeownership. Read on to discover the grants and schemes available and which ones you can apply for. No nonsense, just facts.
Help to Buy Scheme
The Help to Buy (HTB) Scheme helps first-time buyers purchase a newly-built house or apartment in Ireland. Once-off self-build homes are also applicable. It only applies to properties that cost €500,000 or less.
The HTB Scheme gives a refund of the lesser of the following (the maximum amount of relief being €30,000):
- 10% of the purchase price of a new build property
- The Income Tax and Deposit Interest Retention Tax (DIRT) you have paid in Ireland over the previous 4 tax years.
To qualify, you must not have previously purchased a property (including property abroad) – this means ‘Fresh Start’ buyers cannot apply for HTB. The property you are purchasing must be used as your primary residence for at least 5 years, and you must take out a mortgage. You must also be tax compliant for four years immediately before you apply.
This scheme is available until 31 December 2025, and people who are using the Local Authority Affordable Purchase Scheme or the First Home Scheme may also apply for Help to Buy. To learn more about the Help to Buy Scheme, see citizensinformation.ie.
First Home Scheme
The First Home Scheme is a shared equity scheme, sponsored by the government of Ireland and participating lenders, which aims to bridge the gap for qualifying participants who otherwise might not be able to purchase a home due to insufficient funds.
Homebuyers enter into a contract with the FHS and receive funds from the Scheme in return for the FHS taking a percentage ownership in the property. You can get up to 30% off the market value of your new property with the First Home Scheme. This is reduced to 20% if you are also availing of the Help to Buy Scheme.
This scheme applies to newly built homes only (including self builds), unless you want to buy the home you are renting because your landlord is selling the property. This version of the FHS is called the Tenant Home Purchase Scheme. This is an extension of the FHS that includes non newly built homes, but it does not qualify you for the Help to Buy scheme.
You must be a first time buyer or a ‘Fresh Start’ applicant (divorced, separated or bankrupt with no financial interest in any property previously owned) in order to qualify for the scheme. You must have the 10% deposit from your own funds, and you must use an approved mortgage broker.
Word of warning that if you use the FHS, the State has equity share in your property – if the value of your property increases, their value of their share will also increase. You can buy them out at any time.
Affordable Purchase Scheme
The Local Authority Affordable Purchase Scheme assists individuals with moderate incomes in buying new homes at reduced prices. The local authority (council) acquires a percentage stake in the purchased home, corresponding to the discount granted (between 5% and 40%). The homeowner is required to buy back this stake after 40 years or upon selling the property, with the option to repay it earlier.
The scheme primarily targets first-time and fresh-start buyers, but you may also qualify if your current home is no longer suitable for your household. The Help to Buy Scheme can be used in addition to the Affordable Purchase Scheme. You must have a deposit of minimum 10% of purchase price.
To qualify, applicants must meet income criteria, where their purchasing power (four times gross annual income) should be less than 85.5% of the open market value of the affordable home. Alternatively, individuals can qualify by providing proof from a bank or financial institution that they are unable to secure a mortgage for 85.5% of the home’s market value, possibly due to factors such as age.
You need to apply through your local authority. When homes are available under the scheme they will be advertised on the local authority’s website and in a local newspaper. More information on the criteria is available here.
Vacant Property Refurbishment Grant
The Vacant Property Refurbishment Grant funds the refurbishment of vacant and derelict homes. The grant is available to people who are refurbishing a property to live there or rent it out. You can get a grant of up to €50,000 to renovate a vacant property, with an option to qualify for a top up if the property is derelict (see below).
Derelict Property Top-Up
If the property is derelict (structurally unsound and dangerous), it is likely that the refurbishment costs will exceed the initial €50,000 grant. If you can prove that the property is indeed derelict, you can apply for an additional €20,000 top-up. This means the total grant available for a derelict property is €70,000.
Some important things to note: The property must be built before 2008, must be vacant for at least 2 years, and you must be able to prove ownership. Note that since this grant applies only to older buildings, you cannot avail of the Help to Buy Scheme. More information is available on the gov.ie website.
Speak to a Solicitor about your options
The government schemes aim to make homeownership more achievable for first time buyers. Getting informed about these schemes is a great first step towards your goal. It is vital to discuss these schemes with a qualified legal advisor to ensure you get the best possible outcome. Contact us today for advice.
