How to get a mortgage without a deposit in Ireland

When it comes to buying a property in Ireland, your deposit is one of the strongest tools in your pocket. Saving for a deposit for a mortgage in Ireland is something we help many of our customers do.

However, some people do need extra help. And the good news is that the government’s Help To Buy (HTB) Scheme provides this assistance.

Strictly speaking, you’ll still need a deposit to buy a property in Ireland. But the HTB Scheme is a government incentive scheme designed to help first-time buyers purchase a newly built home. 

How does the Help To Buy Scheme work?

If you avail of the Help To Buy Scheme, you can claim up to a maximum of €30,000 or 10% of the value of a property – whichever figure is lower.

Initially, the scheme was up to €20,000.

However, in July 2020, as one of the responses to the Covid pandemic, the government increased this figure to €30,000. The scheme as it currently stands will be in place until the 31st December 2021.

Do you qualify for the Help To Buy Scheme?

The maximum tax refund you can claim for under the HTB Scheme is for €30,000 or for 10% the value of the property. And the rebate is available for properties that are valued at €500,000 or less. 

Therefore, if you buy a house for €300,000, you would be able to claim the maximum rebate available of €30,000. But if you buy a property for more than €300,000, the rebate will still be a maximum of €30,000.

The income tax and/or DIRT tax you have paid in the last four years before you apply for the HTB Scheme will be taken into account to gain your HTB rebate. The amount of money you are claiming for the HTB Scheme must at least be equivalent to what you have paid to Revenue over this period of time.

USC and PRSI are not considered when calculating how much you can expect to receive from the HTB Scheme.

Saving for a deposit is still a good idea

In theory, if you qualify for the €30,000 HTB Scheme rebate you won’t need a deposit.

However, a deposit is about more than money to put towards your property purchase. It’s also about showing lenders evidence that you have strong money management skills. 

Therefore, saving for a deposit, no matter how modest, is still a strong way to reassure banks and lenders that you’re good for credit. 

The money you save will also be handy for paying the extra costs that come with buying a property, such as stamp duty and legal fees.

HTB scheme conditions and criteria

The HTB Scheme is exclusively for first-time buyers for newly built properties.. 

If you have bought a property in Ireland or anywhere else in the world, you will not qualify for this scheme. You also can’t have bought a property or built one with any other individual. 

If you are planning on submitting a joint application, both parties will need to be first-time buyers.

The HTB Scheme is also for newly constructed homes or self-builds. Conversions of existing homes do not qualify for the scheme. 

You need to take out a mortgage for a property under the HTB Scheme. You can’t buy the property for cash and then claim the HTB Scheme afterwards. You need to have a loan-to-value mortgage on the property of at least 70%.

As an example, if you’re purchasing a property of €250,000, then your mortgage needs to be at least €175,000.

You also need to live in the property for at least five years after you purchase it. You cannot buy a property with the HTB Scheme and then let it out.

One of the caveats of the HTB Scheme is that the builder of the property you’re buying needs to be registered with Revenue. Without this, you can’t claim a refund under the HTB Scheme. You’ll find a list of qualifying builders here.

Some of the other caveats and conditions you need to fulfil are:

  • You need to be fully tax compliant in the four years prior to claiming the HTB Scheme.
  • You’ll need to complete a Revenue form called Form 12 if you’re an employee, and Form 11 if you’re self-employed, for each of the four years prior to claiming the HTB scheme.
  • When you apply for the HTB Scheme, Revenue will confirm your application with the builder of your property. 
  • The solicitor you work with for your property purchase also needs to be registered with Revenue.

We can help you apply for the HTB Scheme if you qualify for it.

We’ve helped many of our customers apply for the HTB Scheme.

We then include the HTB Scheme approval in your mortgage application. It shows the lender that you have funds to complete the purchase. It’s a streamlined and stress-free process for our customers.

Contact us today if you’d like some help or to chat about your property dreams. We’d be delighted to help you!

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