Cathal Crowe (Clare, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

85. To ask the Minister for Finance if he can devise a mechanism to prevent developers from not accepting the help-to-buy scheme as a deposit for a new house purchase; and if he will make a statement on the matter. [11688/23]

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

Help to Buy (HTB) is a scheme available to first-time purchasers who are buying or building a new house or apartment. It offers a refund on Income Tax and Deposit Interest Retention Tax (DIRT) paid in the State over the previous four years, subject to limits outlined in section 477C of the Taxes Consolidation Act 1997.

Section 477C Taxes Consolidation Act 1997 outlines the definitions and conditions that apply to the HTB scheme. One such condition, where a property is being purchased rather than self-built, is that a purchase contract is entered into with a “Qualifying Contractor” (QC).

In order to become a registered QC, a contractor/developer must first apply to Revenue and meet certain requirements as outlined by section 477C(2). In summary, the contractor must be tax compliant and be either a zero rated, or 20% rated, contractor for the purposes of Relevant Contracts Tax.

QC’s have an important role in the HTB process, including verifying information provided by the HTB applicant. Where the conditions of the HTB scheme are satisfied and a HTB refund is available, the HTB refund is paid to the QC to be offset against the purchase price of the property.

Participation in the Help to Buy Scheme is voluntary. A list of QCs registered under the scheme is published on the Revenue website.

Section 477C does not specify at what stage the HTB refund should be accounted for by the contractor in terms of payments on account for the property. As such, while the HTB scheme aims to assist first-time purchasers with funding the required deposit, the amount of the deposit and timing of the payment of the deposit is a matter for negotiation between the purchaser and the contractor.

As the Deputy will appreciate, any further specification within section 477C as to the timing of the payment is a matter which would fall to be considered in the context of the annual Budget and Finance Bill process.