The Help to Buy Scheme (the "Scheme") introduced in Finance Act 2016 is designed to assist first time buyers in obtaining a deposit required to purchase a home. The Scheme provides for a refund of income tax and DIRT suffered over the prior four tax years up to a maximum of €20,000. In order for a first time buyer to qualify, there are a number of conditions to be met in respect of the first time buyer, the type of residence and its maximum price. The fact that the developer must also qualify for the Scheme is not widely known.
Revenue has stipulated that in order for a first time buyer to qualify for the Scheme in purchasing a residence from a developer, that developer must first register and qualify under certain conditions. It appears that Revenue have used the Scheme partly as a mechanism to ensure the ongoing compliance of developers with relevant contracts tax ("RCT"). To date, only eleven developers nationwide have registered for the Scheme. Revenue has noted that further registrations for the scheme are in progress and that they will engage with the Construction Industry Federation over the coming weeks on how the scheme will work.
In order for a developer to qualify as a "qualifying contractor" under the Scheme, it must submit a completed HTB1 form to Revenue via the developer's 'MyEnquiries' account on ROS. Information required in completing this form includes:
- the developer's VAT and RCT registration numbers;
- eTax Clearance Access Number;
- confirmation of the RCT deduction rate (the developer may not qualify for the Scheme if it has a RCT deduction rate of 35%);
- consent to have the developer's name listed on the Revenue website as a qualifying contractor for the purposes of the Scheme;
- details of planning permissions in respect of qualifying (or proposed qualifying) residences;
- details of the qualifying (or proposed qualifying) residences offered for sale during the period in which the Scheme is available; and
- details of the interest in the land on which the residences are constructed.
Clawback provisions may apply to developers in the event that the purchase of a residence is not completed. These provisions include the placing of a charge on the lands owned by the developer where deemed necessary to secure the repayment of Help to Buy amounts in the event of non-compliance. Once the residence is completed and conveyed to the first time buyer any further compliance responsibilities become the sole responsibility of the purchaser.