Niamh Smyth (Cavan-Monaghan, Fianna Fail)
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229. To ask the Minister for Finance if he will review and address concerns (details supplied) in relation to the help-to-buy scheme; and if he will make a statement on the matter. [13767/17]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy may be aware, there are three elements to the payment provisions under the Help to Buy incentive.

- Firstly, in respect of a first home purchased or self-built in the period from 19 July to 31 December 2016, the refund is paid directly to the purchaser or self-builder, that is 'to the claimant's bank account'. 

- Secondly, for a first home purchased from a qualifying contractor in the period from 1 January 2017 to 31 December 2019, the refund is paid to the qualifying contractor's bank account.

- Thirdly, for a self-built home where the first tranche of the mortgage is drawn down in the period from 1 January 2017 to 31 December 2019, the refund is paid to the 'claimant's qualifying loan bank account', which is taken to be an account with the financial institution that extended the mortgage.

In relation to the concerns provided by the Deputy around the beneficiaries of the Help to Buy incentive, its purpose is to assist first-time buyers to fund their first home, whether purchased from a builder or self-built. The first-time buyer or self-builder in any of the three circumstances described above gets the benefit of the scheme, as their refund under the Help to Buy incentive is a credit against the purchase price/build cost of the home.  In the case of a first-time buyer who purchases a home after 1 January 2017, she or he is getting the benefit of the refund even though he or she does not receive the Help to Buy refund directly.  The legislation, in Section 477C(16)(b), of the TCA is very clear 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.'

Furthermore, regarding the comments referred to by the Deputy concerning the deposit process, the Help to Buy incentive aims to assist a first-time purchaser with funding a deposit at the outset of the purchase or self build process. However, there are inherent differences in the relevant processes. For a purchaser buying a new build, the first major expenditure is the point at which they enter into a contract to purchase and pay over the full deposit. I am advised by Revenue that from their discussions with the Construction Industry Federation, their understanding of the usual purchase process involves the payment of a 2 per cent booking deposit, followed by the payment of the balance to bring the deposit up to 10 per cent of the purchase price upon the signing of the contract. The timing of the payment of this deposit is a matter between the purchaser and seller but it is only when a contract has been entered into that a claim can be made for the tax refund under the scheme.

For a self-build property, the first major expenditure point usually coincides with the draw down of the first tranche of the relevant mortgage, and thus the refund is payable at this point in respect of self builds. The Help to Buy refund is worth 5 per cent of the value of the property, up to certain limits, and the legislation provides that it is a credit against the purchase of the new home.