How do I value self-build home for Help to Buy scheme?

Q&A: Dominic Coyle

The definitions in Finance Bill 2016 state an “approved valuation” for a self-build is the valuation approved by your mortgage lender.  Photograph: Neil Hall

The definitions in Finance Bill 2016 state an “approved valuation” for a self-build is the valuation approved by your mortgage lender. Photograph: Neil Hall

 

I am currently building a home that I started two weeks ago through a building contractor and looking to qualify for the Help to Buy scheme.

I am wondering how the €500,000 cap will be evaluated. Will it be based on the contract value, an independent valuation or the mortgage drawdown? I can’t find this detail published anywhere.

Mr J McH, email

As with most things on budgetary matters, the best bet is to go back to source material – in this case the Finance Bill, which is the measure that translates budget day measures into law when you agreed the mortgage.

At the start of all pieces of legislation, there are listed a series of definitions, setting down how certain terms are used in the context of that Bill. In this case, this is where your answer lies. The definitions in Finance Bill 2016 state that an “approved valuation” for a self-build is the valuation approved by your mortgage lender.

Later in the definitions section, it clarifies that the “purchase value” for the purposes of determining eligibility under the Help to Buy scheme is, for self-builds, the “approved valuation”.

So, assuming you’re a first-time buyer, the mortgage you drew down from your lender is no more than 90 per cent of the value of the home as assessed by the lender, was drawn now after July 1st last and is below the €500,000 cut-off, you should be eligible.

Tax rebate

Beyond that, you will need to apply for the scheme come January 3rd when applications open, giving your name and PPS number, the address of the property, its “purchase value”, who the lender is and to which bank account you want any income tax rebate sent.

You’ll also need to confirm that you will use the property as your main residence once it is built.

Having done all that, your solicitor will have to confirm much of it again. Specifically, they will have to confirm your name, the address of the property, and its “purchase value”, as well as evidence of your mortgage loan and evidence that you have drawn down the first tranche of the loan.

Finally, the rules lay down that the home needs to be fully built within two years of Revenue paying you the income tax rebate – otherwise they can look for the money back.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice

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