Budget 2017 includes a Mortgage Help to Buy Scheme.

Budget 2017 includes a Mortgage Help to Buy Scheme. The relief is targeted at first time buyers’ and only applies to newly built homes. The scheme is aimed to help people buy their first home and boost supply of newly built homes which is welcome. Some of the key features are:

  • The relief operates in the form of an income tax rebate (excluding USC & PRSI) over the previous four-year tax period, the scheme is backdated for concluded purchases from the 19th of July 2016.
  • Both purchasers must be first time buyers and the property must be for a private principal residence.
  • The maximum claim is 5% of the purchase price to a maximum property value of €500,000.
  • The maximum rebate is €20,000.00 per property (not per joint owner). No rebate applies if the new home is valued over €500,000.
  • The rebate is limited to the amount of income tax actually paid over the previous four years.
  • The rebate only applies where the mortgage is at least 80% of the value of the property.
  • A joint purchase between a first time buyer and a non first time buyer will not qualify for any rebate.
  • The scheme is set to run to the end of 2019.

Other property related incentives

  • Buy to let mortgage interest can be offset against rental income to 80% of the interest charge from a lender. This has increased from 75% and the relief applies to new and existing buy to let mortgages.
  • It is anticipated that the government will further increase this relief by 5% per annum to ultimately reach 100% mortgage interest relief by 2021.
  • Mortgage Interest Tax relief for those who took out mortgages between 2004 and 2008 was to be phased out by the end of 2017, this has been deferred to Budget 2018.
  • There has been an increase in the Rent a Room allowance to €14,000.00 pa from 2017.