John Brady (Wicklow, Sinn Fein)
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338. To ask the Minister for Finance if a help-to-buy application can be reassessed in circumstances in which the applicant has been approved for the help-to-buy scheme and lengthy delays of 12+ months are experienced by the developer in constructing the home, resulting in prospective homeowners incurring increased rental costs; and if he will make a statement on the matter. [13601/23]

Michael McGrath (Cork South Central, Fianna Fail)
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Help to Buy (HTB) scheme assists first-time purchasers (FTP) with the deposit they need to buy or build a new house or apartment. It offers a refund of Income Tax (IT) and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous four years, subject to limits outlined section 477C Taxes Consolidation Act 1997.

The current HTB process includes three stages - application stage, claim stage and verification stage. It is during the first stage, the application stage, that a FTP establishes the maximum amount of relief due to them, based on the amount of IT and DIRT they have paid over the previous four years. In order to make an application, the FTP must be registered with Revenue’s online service.

Under section 477C(7), a HTB application will expire in certain circumstances, and in order to remain valid, a claim must be submitted by the FTP before an application expires. Where an application expires, a new application will need to be resubmitted by the FTP. Where an application has to be resubmitted due to the expiration of a previous application, the refund years shall be based on the new application.

The circumstances covered in section 477C(7), leading to the expiration of an application, include the following:

(i) it is discovered that the FTP did not satisfy a condition of HTB,

(ii) the FTP’s tax clearance is rescinded, or

(iii) a valid claim is not submitted before 31 December of the tax year in which the application is made. It should be noted here that, where an application is made during the period 1 October to 31 December, and a claim is made on foot of such an application in the period 1 January to 31 March of the following year, the claim will be deemed to have been made in the prior year.

Revenue's Tax and Duty Manual 15-01-46 Help to Buy, under paragraph 11.1, provides worked examples of how section 477C(7) operates. The manual is available from www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-46.pdf

As noted above, the HTB refund due to a FTP is calculated with reference to the amount of IT and DIRT paid by them in the four years prior to submitting an application. Sections 477C(5) and (5A) provide for how the HTB refund is calculated and rental costs incurred by the FTP do not form part of the HTB refund. I am advised by Revenue that, as the HTB scheme is based on refunding amounts of tax already incurred by applicants, it would not be appropriate to include rental costs in the calculation of the refund.

However, I am further advised by Revenue that the person concerned may be entitled to claim the Rent Tax Credit for the years 2022 and 2023. Information relating to the Rent Tax Credit are set out on the Revenue website at: www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/rent-credit/index.aspx.