Help-to-Buy Support Could Rise to €50,000 for Irish First-Time Buyers

Dublin: The maximum tax refund available under Ireland’s Help-to-Buy scheme could increase from €30,000 to €50,000 under a proposal reportedly being considered by Housing Minister James Browne.

The proposed increase could provide additional support to young people and expatriate families struggling to save for a house deposit amid rising property prices. However, the proposal has not yet been formally approved, and the final conditions will need to be outlined in the budget or subsequent legislation.

How the Help-to-Buy Scheme Works

The Help-to-Buy scheme assists eligible first-time buyers purchasing a newly built house or apartment, as well as individuals constructing a new home on their own land.

The scheme refunds eligible Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland during the four years before the year in which the application is made. Universal Social Charge (USC) and Pay Related Social Insurance (PRSI) payments are not included in the calculation.

Under the current rules, the maximum refund is the lowest of:

• €30,000.

• 10 per cent of the property’s purchase price or approved valuation.

• The total amount of eligible tax paid during the previous four years.

For example, if an applicant has paid €22,000 in eligible taxes over the relevant four-year period, the refund cannot exceed €22,000.

If the proposed increase is approved, the maximum refund would rise to €50,000. However, it remains unclear whether the existing 10 per cent property-value limit would also be revised.

If the 10 per cent limit remains unchanged, a buyer would need to purchase a home worth at least €500,000 and have paid €50,000 in eligible taxes during the previous four years to qualify for the full refund.

Eligibility Conditions

Properties valued at more than €500,000 are currently excluded from the scheme. Applicants must also secure a mortgage covering at least 70 per cent of the property’s value and occupy the home as their principal private residence for a minimum of five years.

Where a property is purchased jointly, all applicants must be first-time buyers. Individuals who have previously purchased a house or apartment in Ireland or another country are generally not eligible.

The scheme applies only to newly constructed properties or homes built by applicants themselves. It cannot be used to purchase an existing or second-hand property.

For purchases, the refund is paid by Revenue directly to the approved builder. In the case of self-build projects, the funds are transferred to the applicant’s mortgage provider.

Scheme Extended Until 2029

The Help-to-Buy scheme was announced in 2016 and introduced in 2017. It initially offered a maximum refund of €20,000, which increased to €30,000 in July 2020.

The scheme has helped tens of thousands of households with their home deposits and is currently scheduled to remain in operation until 31 December 2029.

Concerns Over Impact on House Prices

While the proposed increase could provide additional financial assistance to first-time buyers, critics argue that increasing purchasing power alone will not resolve Ireland’s housing affordability crisis.

They warn that if the supply of homes does not increase alongside the additional support, builders could raise property prices, resulting in some of the benefit being absorbed by the market.

As a result, housing advocates have called for the expansion of Help-to-Buy to be accompanied by measures to increase housing supply and bring more properties onto the market.

Government Examines Online Property Auctions

The government may also review the use of 24-hour online property auction systems.

Critics of these platforms argue that allowing buyers to repeatedly increase their bids at any time can create psychological pressure and encourage rushed financial decisions.

Minister James Browne, referring to his experience addressing online gambling issues while serving as a junior minister, said impulsive financial decisions could have serious consequences.

He indicated that further examination may be needed to assess whether auction platforms should introduce fixed bidding periods, improve bid transparency and provide buyers with additional time to consider their decisions.

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