What is the First-Time Buyers Scheme or Help to Buy

The First time buyers scheme or Help to buy as it is most commonly known, is a scheme targeted at a first time home buyer. It was designed to reduce the difficulty in building up the 10% deposit that Banks will require as a minimum deposit for a first time buyer looking to buy a property. It is only applicable to New Homes and you also can not have previously owned a property before to qualify. Availability is limited to Irish Tax payers who meet certain criteria and is subject to financial limits. First introduced by the Government  in 2017, it is due to expire at the end of 2023 but may be extended as it has been in previous years. It is one the most popular housing schemes for first time buyers in Ireland.

The help to buy scheme 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. It doesn’t include USC and PRSI paid. Administered by the Revenue department, its fast and efficient. See https://www.revenue.ie/en/property/help-to-buy-incentive/index.aspx for more. 

How does the help to buy scheme work ?

 When first introduced the new government scheme for first time buyers aimed to tackle the problem that high rents and a lack of new building supply were causing many first time buyers. Some first time buyers had good incomes but were unable to save the required deposit for a house as their rents were so high each month it left nothing for savings. In many cases, a first time home buyer would have been able to get a mortgage on a property where the monthly mortgage repayment was significantly less than what they were currently paying in rent. But they had no money left after paying a very high rent and couldn’t build a deposit – it was a vicious circle.

To bridge this gap, it was decided to introduce a first time buyers grant or the Ireland “help to buy” scheme as its most commonly known.

How much can I claim under the Help to Buy incentive? 

The maximum tax refund is now 10% of the value of the property or €30,000 – whichever is Lower. The rebate is only available on properties valued at €500,000 or less and located in Ireland.

This means that if you purchase a property for €300,000, you can claim the maximum rebate of €30,000. But if you buy a house for €400,000, the relief will be capped at €30,000. See table below which will show the different amounts a first time buyer can claim under the scheme.

New Help-to-Buy rates    

House PriceRelief AvailableRate
€400,000€30,00010% up to €300,000
€500,000€30,00010% up to €300,000

As you can see from the table above, there are certain restrictions on the amount you can qualify for. The reason the first time buyers grant was capped at €500k was that the vast majority of first time buyers do not buy houses above €500k and it was felt that if they had an income that would enable them to buy a house for more than this amount, then the government should not be subsidising wealthy people. Thats not what help to buy is for.

Also, at the time (and still today) there wasn’t enough new homes being built in Ireland. So by targeting the help to buy grant only at a new build property in was hoped that this would stimulate the supply of new homes. Whether or not this has happened is hard to tell. As a result of this policy the first time buyers grant doesn’t apply to second hand homes. There has been some impact on second hand homes as a result.

What does this mean for my savings / deposit ?

Under standard Central Bank rules, a first time buyer will need a 10% deposit on a property. Before the new government scheme for first time buyers, people would have to save up 10% of the value of the property they wanted – so say on a €300,000 house you would need €30,000 in cash. Now you could buy that property without using any of your own money. Yes! . None of your own cash would be required. The Banks will still need to validate that you can afford the mortgage and have sufficient repayment capacity. This has resulted in more and more first time buyers being able to bid/afford new developments coming to the market and has also meant that first time buyers can spend there savings on furnishings and improvements to the property.

How do I apply?

You need to contact Revenue directly. See https://www.revenue.ie/en/property/help-to-buy-incentive/how-much-can-you-claim.aspx

It’s a very straight forward process and they will be able to assess you and a partner (if you are applying jointly). Revenue can get a response to you within a week and its all done on-line. We would encourage all first time buyers to apply for this in advance of starting their property search. We are also happy to help here – contact us on 0858600728 if you need any help. Pangea Mortgages have helped many first time buyers get approved through the help to buy scheme.

Do I have to Live in the Property?

Under the first time buyers ireland grant, it must be your primary residence. This means you can’t live somewhere else and rent the property out. You cannot buy the property with a view to renting it out within the first 5 years. You must also live in the property for 5 years, if you sell the property within this timeframe Revenue have the right to claw back some of the grant they provided. Its not designed to help people make money in the short term so please bare this in mind.

How can Pangea Mortgages Help?

 The first thing we will do for you as a first time buyer is to provide a detailed analysis of your financial position and assess your needs and wants. A New Property may not be suitable for everybody and some first time buyers want an older house with some character or something them can put their own stamp on. We will bring your through our affordability assessment, including our mortgage calculator and as Irelands leading mortgage broker we will provide you with the best advice on what is suitable for you. If you are a first time buyer and decide to go for the first time buyer grant, we can help you to apply through revenue to find out how much you are eligible for. This will impact how much cash you need to put in yourself. We can explain to you how this works at the time.

If you are self employed or work in the public sector, there are specialised lenders that we work with that can provide superior terms to the main street lenders. Some lenders also offer lower rates for new build homes due to the better energy efficiency. Pangea Mortgages can guide you through all interest rates in the market and get the best one for you and your circumstances.

What other Restriction or Criteria are there on the Help to Buy Scheme?

As the first time buyer scheme was designed to help people who were struggling to raise a deposit, first time buyers who have a very large amount of cash will not qualify. So, if you have say €100k of cash and are looking to buy a €300k property you will not be eligible for the first time buyer grant. You must be taking out a mortgage that has a loan to value of 70% or greater.  The vast majority of first time home buyers will fall into this category anyway.

You also must have been fully tax compliant in the four years previous to the claim. As a first time buyer you will need to complete a Form 12 (for PAYE workers) and Form 11 (for the self-employed) in respect of each of the four years. You must also pay any outstanding taxes that are due.

The first time buyer scheme is for owner-occupiers only. You can’t apply as an investor or a landlord – or a fund !!!

Revenue will confirm your application with the builder that you are buying from, or your solicitor directly if you are building your own home. Solicitors and builders need to be registered with Revenue for the Help-to-Buy scheme. Here is the list https://www.revenue.ie/en/property/documents/htb-qualifying-contractors.pdf.

All of the parties involved in the process, so your Builder, Broker and Estate Agent are all very family with the first time buyer grant so don’t be afraid to ask them any questions you have on it.

If your new home is a self-build, it must be a qualifying residence and cannot be a building which was previously used as a residential property. However, properties which have never been lived in before (from ghost estates or commercial units) and are now being converted for residential only use may qualify. Our Mortgage Brokers can help if you have any questions here.

What impact has this had on the market?

When the first time buyers grant was first announced in 2017 it was time limited, so due to expire by the end of 2020. The idea behind this was that it would encourage builders to build houses immediately as they ultimately benefit from the extra money available to a first time buyer. The scheme has proven popular and there has been nearly 10,000 people who have bought a house with the help to buy deposit. Undoubtably, this has pushed up demand and therefore the price of new build property so this would need to be carefully considered by a first time buyer when deciding whether to go for a new home or a second hand one. Pangea Mortgages Economic experts are valuable here in helping to make this decision with you. Contact info@pangeaireland.ie

With the impact of Covid its very hard to tell if the first time buyer grant has been a success or not. Inside stakeholders such as Estate Agents and Builders will claim that it has but there is evidence that nearly half of the people who used the grant already had sufficient savings anyway. In these cases, it simply pushed up the price of the house.


The idea behind help to buy or the first time buyers grant was a good one, initially. The housing industry was in need of a boost and it was due to be a temporary stimulus. However, like most government schemes, it has evolved and begun to distort the market making it harder and harder for first time buyers to know if they should use it or not. It looks now as if it may become a more permanent feature of government policy (free money is always a vote winner!).

Given the complexity and ever evolving housing market it’s important that you have an expert financial advisor with you from the outset. Our team of leading property economists and mortgage brokers have the very best insight into the property market and can clearly lay out for you the pros and cons of this scheme.  At the very beginning of your property search you should contact Pangea Mortgages so that we can help you to decide what the best way forward for you is – Especially if you are a first time buyer and have never been through the process before it can seem very daunting – so contact us today and we can help take you through step by step what needs to be done. As your mortgage broker we look out only for your interests – this may not be the case with the other stakeholders (they are trying to sell their products) so please keep this in mind.

Call us today for a free consultation and if you are a first time buyer or not, we can help !

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