Help to Buy Scheme

The Help to Buy (HTB) scheme will be extended in its current “enhanced” form for 2022. The HTB scheme helps first-time buyers of newly built homes to buy a new house or apartment. The scheme only applies to properties costing €500,000 or less. The HTB scheme gives a refund of income tax and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous 4 tax years.

Under the enhanced HTB scheme, relief can be claimed on the lesser of:

  • €30,000.
  • 10% of the purchase price of a new home (for self-builds, 10% of the completion value of the property).
  • The amount of income tax and DIRT paid in the four years before the purchase or self-build.

Zoned Land Tax

As part of the government’s Housing for All strategy, a Zoned Land Tax will be introduced to encourage the use of land for building homes. The primary objective of the measure is to increase the supply of residential accommodation, rather than to raise revenues.

The tax will apply to land zoned suitable for residential development and is serviced but has not been developed for housing. The tax will target land in areas that are zoned residential or which are zoned for a mix of uses, including residential. To identify zoned land within the scope of the tax, maps will be prepared and published by Local Authorities in advance of the commencement of the measure. 

The new measure will be introduced in the Finance Bill 2021, but an appropriate lead-in time for the general application of the Zoned Land Tax will be provided. It is proposed that a two year lead-in time for land zoned before January 2022 and a three year lead-in time for land zoned after January 2022 will be put in place. The lead-in time will give scope to review the workings of the tax and to listen to stakeholders, and ensure the measure is both effective and equitable.

The tax will operate on a self-assessment basis and will be administered by the Revenue Commissioners.

The rate of the tax will be 3% of the market value of the land. The Zoned Land Tax will replace the vacant site levy.

Pre-letting expenses for landlords

The relief for pre-letting expenses for landlords will be extended for a further three years to end 2024. The purpose of the relief is to encourage landlords in the residential rental sector to return empty properties to the market as quickly as possible. 

For further information on Budget 2022, please contact Brian Duffy or your usual William Fry Tax contact.