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Help to Buy (HTB) scheme

What is a qualifying property?

To qualify for the Help to Buy (HTB) Scheme, the property you purchase or self-build must be:

The property must never have been used, or have been suitable for use, as a residential home. If the property was non-residential, but has been converted for residential use, it may qualify for HTB. If you purchase or self-build the property as an investment, it does not qualify for HTB.

Mortgage

You must take out your mortgage on the property with a qualifying lender. You must use this loan for the purchasing or self-building of the property. The loan must be at least:

  • 70% of the purchase value
  • or
  • 70% of the approved valuation.

This is known as the loan to value ratio.

Purchase value

The purchase value of a new build means the full Open Market Value (OMV) of the property. This is usually the price you purchased it for, unless you paid a reduced price for the property. The full OMV is the purchase value used for the purposes of HTB, in all cases. The purchase value of the property must be €500,000 or less to qualify for HTB.

Approved valuation

If you are self-building a property, you must submit the approved valuation of the property with your claim. The approved valuation is the valuation of the property approved by the lender at the time you took out the mortgage The approved valuation must be €500,000 or less to qualify for HTB.

Shared Equity Schemes

Funding received from the State as part of a shared-equity scheme does not form part of the loan-to-value ratio calculation. There is one exception to this where:

  • you are participating in the Local Authority Affordable Purchase Scheme
  • and
  • you have entered into a contract to purchase a qualifying residence on or after 11 October 2023.

In this case the affordable dwelling contribution received from the Local Authority will be included as a loan when calculating the 70% loan-to-value ratio.

  • Example 

    Mary is a first time buyer. On the 15 October 2023 she purchases a house for €300,000 under the Local Authority Affordable Purchase Scheme. She secures a mortgage for €180,000. She is also eligible for shared equity in the form of an affordable dwelling contribution of €45,000 from her Local Authority. The Local Authority takes a 15% equity stake in the property.

    Total finance for the house
    Source€
    Mortgage 180,000
    Local Authority affordable dwelling contribution 45,000
    Savings 75,000
    Total 300,000

    Mary purchased the property under the Local Authority Affordable Purchase scheme after the 11 October 2023. The affordable dwelling contribution will be included in the loan-to-value calculation as follows:

    (€180,000 + €45,000)/€300,000 x 100 = 75%

    As the loan-to-value is greater than 70%, Mary is eligible for the HTB scheme. If Mary signed her purchase contract before the 11 October 2023, the affordable dwelling contribution would not be included in the loan-to-value calculation.

Note

Shared equity finance availed of under the First Home Scheme is not taken into account in calculating the loan-to-value ratio.

Next: How much can you claim?

Published: 18 January 2024 Print this page

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