Introduction
In Ireland, numerous schemes have been developed to support prospective homeowners in securing properties. With insights from the Irish Mortgage Corporation, their seasoned advisors, and commentary from Joe Flanagan, Business Development Manager, this article offers a comprehensive review of the major property assistance schemes in the country.
1. The Help to Buy (HTB) Scheme
Endorsed by the Irish Mortgage Corporation and expertly detailed by Joe Flanagan:
- Objective: The primary purpose of the HTB scheme is to assist first-time buyers with the acquisition of newly-constructed homes. This scheme covers properties with a value up to €500,000 and is also inclusive of unique self-build homes.
- Benefits:
- Refunds for income tax and Deposit Interest Retention Tax (DIRT) paid in the preceding four tax years in Ireland.
- The facility is directly accessible through the Revenue.
- Eligibility:
- A minimum mortgage of 70% of the property’s purchase price is mandatory.
- Residents are required to occupy the property for a minimum of five years from its date of readiness.
- The HTB can contribute towards the purchaser’s 10% deposit requirement.
2. The First Home Scheme (FHS)
Launched as recently as July 2022, this scheme has been attracting significant attention:
- Overview: The FHS facilitates first-time buyers (FTBs) who are interested in acquiring either a new build or a second-hand property through the Tenant Home Purchase scheme.
- Management: The initiative is administered by BCM Global. Potential applicants should liaise directly with FHS for eligibility checks.
- Terms:
- The scheme, rather intriguingly, retains an equity stake in the buyer’s property, employing a charge on the said property.
- A service fee is levied post the fifth year, which is crucial when evaluating the borrower’s financial capabilities.
For an exhaustive breakdown, please consult the attached FAQ section related to the First Home Scheme.
3. The Local Authority Affordable Purchase Scheme (AFH)
A beacon of hope for many, this scheme has particular terms:
- Goal: It aims to make homes, offered by the local authority, more affordable for first-time buyers, especially when their combined mortgage and deposit might not meet the market price of the new property.
- Modus Operandi:
- Local authorities retain an equity stake in the house, representing the disparity between the open market valuation and the subsidised purchase price.
- The option for homeowners to repurchase the local authority’s equity share is always on the table.
- Procedure:
- Every Local Authority (LA) has distinct AFH policies.
- Each LA must provide a ratified legal priorities agreement to the bank before any scheme gets the green light.
It’s imperative for applicants to engage with their Local Authority, ensuring that the Authority’s Priorities Agreement aligns with the bank’s specifications before initiating any credit evaluation.
4. Vacant Property Scheme
A move to rejuvenate underutilised properties:
- Objective: Supported by the Croí Cónaithe Towns Fund, the aim here is to revitalize deserted properties, turning them into habitable spaces once more.
- Conditions:
- Applicable to properties left vacant for over two years and constructed before 2008.
- Grants up to €50,000 are accessible from the buyer’s Local Authority, with possible additions of €20,000 should refurbishment expenses surpass the base grant amount.
- If a sale occurs within a decade of acquiring the grant, a repayment to the local authority is due, contingent on the property’s occupancy duration.
- Financial Assessment: The grant amount is kept separate during the bank’s credit evaluation. It is pivotal for the customer to have sufficient funds to complete all essential refurbishments. Upon the completion and LA’s endorsement, the grant gets disbursed.
Conclusion
Property acquisition in Ireland has been significantly aided by the introduction of these schemes. Through the expertise of the Irish Mortgage Corporation, their adept advisors, and insights from Joe Flanagan, Business Development Manager, potential homeowners are better equipped to navigate these advantageous initiatives. Before embarking on any property journey, it’s imperative to be well-informed and consider the implications of each scheme.
