First-time buyers claim almost €4m in tax refunds

First-time buyers have claimed almost €4m to date in tax refunds as part of the Government initiative aimed at helping house-hunters secure a home.

Announced as part of last October’s budget, the Help to Buy Scheme provides first- time buyers with a refund of income tax and Dirt paid over the previous four years in order to assist them with the deposit to buy a new house or apartment.

The Government’s early estimates costed the Help to Buy Scheme at €50m for its first year.

However, the scheme would cost closer to €60m if all applications were successful and if payouts maintained the current average of approximately €15,000.

The refund is limited to a maximum of 5% of the value of the property and capped at €20,000.

New figures released by Revenue reveal that while 3,856 applications have been made to date by those considering availing of the scheme, 260 claims to the value of €3.94m have been paid to house-hunters who have decided to buy a property eligible under the initiative.

Those interested in the scheme can apply to Revenue to see if they are eligible for the initiative and to find out the maximum relief available to them under the scheme.

The process then moves onto the claims stage when the buyers have identified a home that they wish to purchase.

To date, 614 claims have been made, of which 260 are approved.

Just over 50% of claims were for properties with a value greater than €300,000.

A total of 181 claims were for homes valued that were between €301,000 and €375,000, while there were 78 claims for properties in the next value band (€376,000 to €450,000) and 58 claims were submitted for houses and apartments valued at over €450,000.

More than half of all claims made were in respect of properties in Dublin and Kildare.

Four in every 10 claims were made in Dublin (246), while almost 13% of claims (79) were submitted for properties in Kildare.

To date, 59 claims have been made in Cork, followed by Meath (46), Wicklow (43), Galway (23), Limerick (18), Waterford (17), and Westmeath (11).

The remaining counties have seen a total of 138 claims between them, with fewer than 10 claims made in each of those areas.

Revenue said it did not provide exact figures for counties with fewer than 10 claims ”to protect confidential taxpayer information”.

The scheme is limited to buyers who need to borrow at least 70% of the value of the home in order to purchase the property.

Revenue also released a breakdown of the loan-to-value ratio of the claims made. Nearly two-thirds (64%) of claims were for properties bought with a loan-to-value ratio of over 85%.

And 17.59% of claims for purchases where the buyers borrowed between 80% and 84.99% of the property’s value.

Only new homes by first-time buyers bought between July 19, 2016, and December 31, 2019, with a maximum value of €600,000 are eligible under the initiative.