I am looking to buy a site and self-build. Can I get a block layer, carpenter, electrician etc, or do I have to go with a registered contractor?
Also when looking for the mortgage, can I use the Help to Buy scheme to help me with my deposit for the mortgage? I have saved just €10,000 but need €18,000 for my 10 per cent deposit. Can I put the Help to Buy money to my €10,000 to make up my 10 per cent?
Mr JC, email
It’s been so long since I’ve had any queries on the Help to Buy scheme that I had to go back to the legislation to refresh myself on the eligibility terms – especially for self-builds, such as you are planning.
That’s good, I guess, as it means the scheme is puttering along nicely without any real hitches – at least for most people.
The Help to Buy scheme was enacted in the Finance Act 2016 and, as currently constituted, runs until 2019. There’s a lot of detail there – it runs to 23 A4 pages.
In terms of self-builds, they can of course be built entirely by you, but there is nothing to stop you having it built on your behalf.
The rules for a self-build applicant making a claim under the scheme are outlined in detail in subsections 14 and 15 of the Act. What is really interesting is that rules lay down specific involvement of a “qualifying contractor” for people buying new homes but makes no such reference to “qualifying contractors” when it looks at self-builds.
So there is nothing in the legislation to say you have to go to a registered contractor and, as far as I can see, there is nothing to stop you engaging your own carpenter, block layer and so on.
The issue with the deposit is a little more complicated but you should be all right. The Revenue will only pay out the money for a self-build under Help to Buy once you have drawn down the first tranche of the qualifying bank loan to fund the work.
The issue here is whether your lender will agree to a loan until you have put your 10 per cent together. The important thing is that, under the legislation, in the case of self-builds, the Revenue will pay the refund into the loan account you have with the bank.
This should provide sufficient comfort for the lender that the full 10 per cent deposit will be met.
They will, no doubt, have required access to your tax affairs to satisfy themselves that the Help to Buy refund will be enough to meet the requirements of the Central Bank that you can provide a deposit of 10 per cent.
Depending on how much you would have coming back to you by way of a refund of income tax over the past four years, it would certainly help beef up the €10,000 you currently have to hand.
The upper limit of the refund is €20,000 or 5 per cent, whichever is the lower. In your case, it appears the build cost is going to be €180,000, so 5 per cent would be €9,000.
That would be enough to bring you over the €18,000 deposit you require.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice
