Michael McGrath (Cork South Central, Fianna Fail)
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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 gives a refund on Income Tax and Deposit Interest Retention Tax paid in the State over the previous four years, subject to limits outlined in the legislation. Section 477C Taxes Consolidation Act 1997 outlines the definitions and conditions that apply to the scheme.

For a property to qualify for HTB, it must be new or converted for use as a dwelling, having not previously been used as a dwelling. Additionally, the purchase value/approved valuation of the property must not exceed €500,000.

Section 477C (1) Taxes Consolidation Act (TCA) 1997, requires the purchase value of the qualifying residence to not exceed €500,000. In the case of a self-build residence, the purchase value is defined as the approved valuation, being ‘the valuation of the residence that, at the time the qualifying loan is entered into, is approved by the qualifying lender as being the valuation of the residence’.

I am advised by Revenue that the property concerned is ineligible for the HTB Scheme as the official documentation from the mortgage lender, at the time the mortgage was entered into, valued the property in excess of €500,000. Notwithstanding that an updated valuation has now been provided, Revenue advises that it does not meet the statutory definition of approved valuations, per Section 477C (1) TCA 1997, as it was not approved by the lender at the time the mortgage was entered into.

Further information in relation the conditions and operation of the Help to Buy Scheme are contained in Revenue’s Tax and Duty Manual Part 15-01-46, www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-01-46.pdf.