Catherine Murphy (Kildare North, Social Democrats)
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102. To ask the Minister for Finance to outline his views on the help-to-buy scheme in view of the fact that the first-time buyer may not be in receipt of the benefit of the scheme (details supplied); the steps he is taking to ensure the transparency and accountability of the scheme; and if he will make a statement on the matter. [10647/17]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy will be aware, the purpose of the Help to Buy incentive is to help first-time buyers fund their first home, whether purchased from a builder or self-built. The incentive applies for the period from 19 July 2016 to 31 December 2019. The legislative provisions for the Help to Buy incentive are set out in Section 477C of the Taxes Consolidation Act 1997, as inserted by Section 9 of the Finance Act 2016.

There are three elements to the payment provisions. Firstly, in respect of a first home purchased or self-built in the period from 19 July to 31 December 2016, the HTB refund is paid directly to the purchaser or self-builder, that is to the claimants bank account. Secondly, for a first home purchased from a qualifying contractor in the period from 1 January 2017 to 31 December 2019, the Help to Buy refund is paid to the qualifying contractors bank account. Thirdly, for a self-built home where the first tranche of the mortgage is drawn in the period from 1 January 2017 to 31 December 2019, the refund is paid to the claimants qualifying loan bank account, which is taken to be an account with the mortgage institution that extended the mortgage.

In the individual case raised by the Deputy, the first-time buyer purchased a house after 1 January 2017, paid the standard 10% deposit to the builder, and subsequently became aware that the Help to Buy refund is to be paid to the builder or qualifying contractor. The first-time buyer in such an instance still gets the benefit of the scheme as their Help to Buy refund is a credit against the purchase price of the house, albeit that they are not receiving the refund directly to themselves. The legislation, in Section 477C(16)(b), of the Taxes Consolidation Act 1997 is very clear in that regard, noting that: Where the appropriate payment is made in respect of a claimant to a qualifying contractor the contractor shall treat the appropriate payment as a credit against the purchase price of the qualifying residence.

I am advised that information about how refunds were to be paid, including the fact that qualifying contractors would be paid the refund for purchases after 1 January 2017, has been included in the Revenue guidance documentation and Frequently Asked Questions on Help to Buy since shortly after I announced the scheme on Budget Day last October.

Furthermore, Revenue has briefed the Construction Industry Federation (CIF) on a number of occasions on the operational detail of the scheme. CIF members have been advised that the Help to Buy incentive is to operate on the basis of helping first-time buyers meet their deposit requirements and, specifically, that contractors should give first-time purchasers the benefit of the appropriate refund when they are finalising the sale contract and the arrangements for the payment of the deposit. I am satisfied that it has been clearly communicated that any valid refunds under the Help to Buy incentive for first home purchases made after 1 January 2017 are to be paid to qualifying contractors.

On the wider issue of assuring the probity of the scheme, in the first instance, in order to qualify to participate in the scheme, a contractor must apply to become a qualifying contractor and they have to meet certain documentary requirements as well as, amongst other things, being fully tax cleared. I am also advised by Revenue that its programme of compliance checks during 2017 and beyond will include a focus on ensuring that the mechanics of the scheme, including the refund arrangements, are operating properly and in accordance with the legislation.

If the Deputy's constituent has any concerns that the scheme is not operating properly in the case of their own particular development, and if the Deputy wishes to provide specific information to my officials, I will ask Revenue to examine the matter.