I need help to buy!

A brief overview of the government schemes currently available to first time buyers. One of the first steps to buying a home is to get mortgage approval. However, getting mortgage approval is not always easy and it can take a number of years to save for a deposit. The most important issue for many people is affordability. The government has the following schemes in place that can help first time buyer’s with a purchase of their new home:

• Help to Buy Incentive
• Rebuilding Ireland Home Loan
• Mortgage Allowance Scheme

1. Help to Buy incentive The government’s Help to Buy Scheme enables eligible first time buyers to get up to 5% of the purchase price of a new house or apartment back in the form of a tax rebate. This can then be used towards the deposit on the purchase. The property must be occupied by the first-time buyer, or at least one of the first-time buyers in the case of multiple first-time buyers, for a period of five years after they buy or build it. The scheme was introduced in January 2016 and will be in place up until 31 December 2019. There will likely be no decision on the extension of the scheme until October of this year. Eligibility criteria To be eligible you must meet the following criteria:

• A first-time buyer who either buys or self-builds a new residential property between 19 July 2016 and 31 December 2019. If you are buying or building the property with someone else, they must also be a first-time buyer. You will not qualify if you have previously bought or built a property, either individually or jointly with anyone else. It does not cover investment properties.
• Cash buyers do not qualify. You must take out a mortgage of at least 70% of the purchase price with a qualifying lender and a guarantor on the loan is not allowed.
• The Help to Buy scheme only applies to properties costing €500,000 or less and you must occupy the property for five years after you buy or build it.
• The maximum rebate is 5 per cent of the value of the property, up to a maximum of €20,000 and is available only on properties valued at €500,000 or less.

2. Rebuilding Ireland Home Loan The Rebuilding Ireland Home Loan is a government backed mortgage for first time buyers. Loans are offered at reduced rates and can be used to buy both new and second-hand properties or to build a home. The Rebuilding Ireland Home Loan has been available nationwide from local authorities since 1 February 2018. First time buyers can borrow up to 90% of the market value of the property. The maximum market value differs depending on where your home is located. The maximum market value in the counties of Cork, Dublin, Galway, Kildare, Louth, Meath and Wicklow is €320,000 and €250,000 in the rest of the country. To apply you must submit your application form and supporting document in person to your local authority. Eligibility criteria To be eligible you must meet the following criteria:

• A first-time buyer between the ages of 18 and 70 years old.
• Continuous permanent employment or self-employment for a minimum of two years, if you are the primary applicant. In general, secondary applicants must have been in continuous permanent employment for a minimum of 1 year.
• Submit two years certified accounts if self-employed
• Provide evidence of refusal or insufficient offers of finance from two banks or building societies.
• Have a satisfactory credit record.
• Have a deposit of at least 10% of the purchase price of the property (if you are eligible for the Help to Buy incentive mentioned above, you can use this towards your deposit).
• Occupy the property as your normal place of residence.

3. Mortgage Allowance Scheme This scheme was introduced to assist householders who are tenants or tenant purchasers of local authority houses to become owner-occupiers of other dwellings. The Scheme is designed to ease the transition from social housing to paying a mortgage. An allowance of up to €11,450 is payable directly to the lending institution funding the purchase  over a 5 year period and your repayments are reduced accordingly for the first 5 years of the mortgage. Eligibility criteria To be eligible you must meet the following criteria:

• You must be a local authority tenant or a tenant purchaser and want to buy a private house and return your present house to the local authority
• You must be financing the purchase or building of your house by means of a mortgage loan of at least €38,092.14.

The above schemes represent an attempt by Government to be more targeted in the assistance it offers to those taking their first steps onto the property ladder. Previous measures such as the First Time Buyers Grant and the Stamp Duty exemption on new houses were criticised for being available to all Purchasers and so driving up the price of new houses during the early 2000’s. Help to Buy is due to expire at the end of this year however there is €200 million in funding behind the Rebuilding Ireland Home Loan and more funding may be in the pipeline.