Tuesday, 25 May 2021
Department of Finance
172. To ask the Minister for Finance the reason purchasers of newly completed houses at Loreto Wood, Cavan, County Cavan are unable to avail of the help-to-buy scheme; and if he will make a statement on the matter. [28047/21]
197. To ask the Minister for Finance if there is a provision for purchasers to avail of the help-to-buy scheme in instances in which the development company has not registered for the scheme; and if he will make a statement on the matter. [28048/21]
I propose to take Questions Nos. 172 and 197 together.
The Help to Buy (HTB) incentive is a scheme to assist first-time purchasers with the deposit they need to buy or build a new house or apartment. The incentive provides a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous four years, subject to limits outlined in the legislation. In the case of a purchase of a new home, the property must be a "qualifying residence" sold by a "qualifying contractor".
Section 477C(1) of the Taxes Consolidation Act 1997 (TCA) defines a qualifying residence as a new building which was not, at any time, used or suitable for use as a dwelling. Renovation or refurbishment of old houses to either upgrade or reinstate them for habitation does not qualify for HTB.
For a vendor to become part of the HTB process, they must first apply to Revenue to register as a qualifying contractor. The requirements that must be satisfied by the contractor are as outlined in section 477C(2) TCA. These include that the contractor must be tax compliant and either a zero rated or 20% rated contractor for the purposes of Relevant Contract Tax (RCT). Revenue Tax and Duty Manual Part 15-01-46 provides further details.
Qualifying contractors are required to verify information provided by the applicant in the HTB process. Where the conditions of the HTB are satisfied and a HTB refund is available, the HTB refund is paid to the qualifying contractor to be offset against the purchase price of the property.
Revenue advise that in order to determine if the properties in question satisfy the definition of a qualifying residence, consideration would have to be given to whether the construction of the properties started before the introduction of the HTB scheme; when the properties were completed, and whether the same contractor started and finished the property. Revenue Tax and Duty Manual Part 15-01-46 outlines further guidance on what would be considered a “new” house. Examples 5, 6 and 7 may be particularly relevant as they outline scenarios where a contractor may have started the construction of the property before the introduction of the HTB scheme. Revenue further advise that to determine if the HTB scheme would be available for the properties at Loreto Wood, Cavan, the full facts and circumstances would need to be considered to determine if the HTB conditions are satisfied.
Details may be sent to Revenue's HTB team to Personal Division at PAYE Services, PO Box 327, PAYE Mail Centre, Churchfield, Cork.If the Deputy requires any further clarification, he may wish to contact Revenue’s Oireachtas helpline at 01-8589999.