Who applies for Help to Buy on self-build projects?
Q&A: Dominic Coyle
Self-build: only after you have made your claim under the Help to Buy Incentive, does the solicitor enter the picture
We are doing a self-build (using a contractor at a fixed price) and will be drawing down our first tranche of the mortgage in the next two weeks. It is quite unclear what process we follow for the Help to Buy Scheme.
First, do we apply using our solicitor or contractor? Revenue has given us mixed answers.
Second, we do not need the money for a deposit as we are using the land as a deposit and getting the full mortgage from the bank so, in this case, does the money from the Help to Buy scheme go into our loan account?
We would obviously prefer the “refund” amount to be given to us directly in a lump sum for us to do as we wish as opposed to paying off the “top” of our mortgage where we will not notice a major difference.
Mr MB, email
My understanding is that you apply on your own account, not going through either your solicitor or contractor. I’m not entirely surprised that you’re having some trouble getting a precise fix on this as the legislation runs to 23 A4 pages in the Finance Act 2016.
Revenue has put out advice to applicants but the legislation, once you battle through it, seems to give the clearest picture.
The relevant section of the Finance Act (Section 9) basically inserts a new section 477C into the Taxes Consolidation Act 1997 (as amended). In subsection 3, it says that, in the case of self-build projects, you can make an application under the Help to Buy Incentive once they have drawn down the first tranche of their loan. That makes you the claimant.
Later, in subsection 14, it clarifies that you will need to provide Revenue with various pieces of information. These include:
– Your name and PPS number.
– The address of the property being built and confirmation that it will be your main (or, in Revenue-speak principal-private) residence.
– The purchase value of the residence (from details provided by value for purposes of securing your mortgage).
– The details of the lender, confirmation that you have secured a mortgage and the size of that mortgage.
– Details of the account to which any payment will be made by Revenue.
The application can only be made through the MyAccount online portal of the Revenue for which you have to register, or through ROS Revenue Online Service for people already registered there.
Only after you have made your claim, does the solicitor enter the picture and subsection 15 of the new section 477C outlines what they have to do – most of which involves confirming that you are who you say you are, the property is where you say it is and that you have indeed taken out a mortgage and for how much.
The other critical issue is that the contractor you use must be a “qualifying contractor”. This is dealt with in subsection 2 of section 477C but, essentially, it means your contractor must have applied to Revenue to carry out work under the Help to Buy scheme, they must be tax compliant and Revenue must have a list from them of the projects they are working on.
If they are not on the Revenue list, you won’t get paid, so it’s worth ensuring they are. The list of contractors who qualify can be found at http://iti.ms/2nD72yW.
Once everything is in order, we get to where the money is sent – most important.
For all self-build projects, once the application is approved by Revenue, the money will be sent to your account. There is no question of it being allocated otherwise – such as to top off your mortgage.
Send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to email@example.com. This column is a reader service and is not intended to replace professional advice.