Revenue seeks tens of thousands of euro over help to buy scheme

Revenue is demanding tens of thousands of euro in back-payment, interest, and fines from homeowners that were mistakenly included in a scheme to aid first-time buyers.

It has been claimed in the Dáil that the mistake was due to a software error, and that payments demanded from householders could amount to more than €100,000 each.

The Irish Examiner has seen correspondence from Revenue to one household who were told they qualified for the help-to-buy (HTB) scheme, and were paid a five-figure sum in taxback towards their new home — only for Revenue to later demand the money back, with interest and fines, within a month.

The interest rate added to the backpayment can add hundreds of euro a month to the amount owed, depending on the sum originally paid.

HTB allows first-time buyers who buy or self-build a new residential property to claim a refund on the income tax and Dirt they paid over the previous four tax years.

While applicants registered for HTB via Revenue’s website, it has emerged that Revenue has since reviewed successful applications, and found that some of them did not qualify for the scheme. It has written to these applicants to demand the money back within 30 days, and said a daily interest rate of 0.0219% applies to the debt.

In one correspondence seen by this newspaper, Revenue this month told an applicant they are also liable for a fine of €3,000 if their incorrect application was made “carelessly”, or €5,000 where incorrect information was deliberately given.

The matter was raised in the Dáil by Cork North West Fianna Fáil TD Michael Moynihan who claimed the mistake arose due to the software used by Revenue, and that homeowners are “frightened by the documents coming from the Revenue Commissioners”.

“They are being told they will have to repay the money, pay a fine of €3,000 or €5,000 and an interest rate per day of a percentage of that. Depending on how that is calculated, it comes to more than €100,000,” he said.

Revenue, however, rejected Mr Moynihan’s claim there was a software issue and said its HTB online systems “are robust”.

“The HTB incentive operates on a self-assessment basis,” Revenue said.

“The online system rejects claims, unless the claimant inputs details that meet the eligibility criteria. In line with Revenue’s normal risk-based compliance framework, targeted compliance checks are conducted.

“To date, a small number of letters have issued to HTB claimants,” it said.