What is the first-time buyers scheme?
During Budget 2017, the government announced the “First-time buyers” scheme. What exactly is it and how does it work?
The department of housing, planning, community and local government define the plan as having the “dual benefit of helping first-time buyers to buy their first home, while also encouraging extra supply of new homes by increasing ‘realisable demand’.”
So, why did the government introduce the scheme?
The background – 2015:
24% of house purchases were by first-time buyers with only 25 of those being new builds.
Movers’ and investors’ transactions have grown by 285% and 344% respectively since 2010, while first-time buyers’ transactions grew by only 15% in the same period.
For every 11 properties bought by first-time buyers only 1 was a new build.
How does it work?
The scheme only applies to new homes (this does include self-builds) purchased by first-time buyers.
Income tax rebate of 5% of the maximum purchase price of a €400,000 new build, up to a maximum tax rebate of €20,000.
Properties up to €600,000 can qualify but the max grant is capped at €20,000.
First-time buyers will receive prior to purchase an up-front, once-off payment of the income tax rebate.
The tax rebate is based on the first-time buyers’ previous 4 years’ tax returns.
What does it look like in action?
For more information on the “First-time buyers” scheme visit the Department of Housing, Planning, Community and Local Government.