First-time Buyer Incentives

A report issued this week by the Banking & Payments Federation has revealed that Irish housing supply is unlikely to reach demand until the end of 2023, at the earliest. This shortage of supply makes it difficult for first-time buyers to get on the property ladder.

While reports such as the above mentioned are often more relevant in Dublin, Cork and other cities, this report certainly seems to have relevance across the country. Successive Governments have tried to assist first-time buyers with various incentives, outlined below.

Definition of a first-time buyer

A first-time buyer is considered to be anyone who has never previously had a home loan,  anywhere in the world – not just Ireland. in relation to joint applications, if either applicant previously had a home loan, then they will not be considered first-time buyers.

1.    Better Borrowing Limits

First-time buyers, living and purchasing in Ireland, may borrow up to 90% of the purchase price whereas next-time buyers are limited to 80%.

2.    Help-to-Buy

The Help-to-Buy Scheme is an incentive available to first time buyers, subject to certain conditions. The terms of the scheme were temporarily enhanced earlier this year and will be reviewed on or before 31st December 2021. The principal conditions are as follows:

  • The applicant(s) must be purchasing a new property or building themselves
  • The amount sanctioned will be the lesser of:
    • 10% of the purchase price (or value, for self-builds)
    • The total income tax paid and DIRT paid by the applicant(s) in the previous 4 tax years.
    • The maximum amount payable of €30,000
  • The applicant(s) must be getting a mortgage of at least 70% of the purchase price/value. E.g purchase for €300,000 – must be getting a mortgage of €210,000 or higher.
  • The seller of the property must be a Qualifying contractor who has registered with the Revenue and proven themselves to be tax compliant.

3.    Rebuilding Ireland

A Rebuilding Ireland Home Loan is a Government-backed mortgage for first-time buyers, available through Local Authorities. These mortgages can be used in the purchase of new or second-hand properties or for self-builds. Loans of up to 90% of the market value of the property are available at favourable rates, and the Local Authorities are allowed to exceed the income multiple limits by which mainstream lenders are bound, which can make this an attractive option for some applicants.

Applicants must:

  • be first-time buyers in continuous employment for at least 2 years.
  • have an income of no more than €50,000 for single applicants or a combined €75,000 for joint applicants.
  • have been refused by at least two lenders for finance
  • be buying a property costing no more than €250,000 (€320,000 in Dublin & other larger urban areas)

If you are thinking of buying a property it is important to discuss your mortgage options with a mortgage broker who will help you through the process with informed advice along the way.

Mortgage brokers know exactly what lenders are looking for. Once they have the above information they can help package an application and relieve the client the stress of dealing with the lender directly.

At McGuire Liston, we will be delighted to assist you on your mortgage journey. Please contact our Killarney or Tralee office if you have any queries.