Thousands of first time could be missing out on a government scheme that will let them claim back a minimum of €10,000 amid the cost of living crisis.
The First Home Scheme is aimed at first time buyers or recently separated couples, and the scheme takes a percentage equity stake in the home which is equal to the level of support provided to enable the purchase, RSVP Live reports. For example, if the scheme provides 30% of the funds for your home, it will take a 30% equity interest in your home.
The scheme then allows you to buy back this percentage on your home later, and it means you'll fully own your home. The minimum amount you can get from the scheme is 2.5% of the property purchase price, or €10,000, whichever is higher.
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Here's everything you need to know about the First Home Scheme, who is eligible, how much it is, and more.
What is the First Home Scheme?
The First Home Scheme (FHS) is an affordable housing scheme, which supports people to buy new homes. The scheme is mainly for first time buyers who want a new build, but their mortgage and deposit won’t cover the cost.
However, under the government’s ‘fresh start’ principle, people who are separated, divorced or whose relationship has ended are also eligible to apply for support through this scheme. People who have undergone insolvency proceedings and have no interest in their former home can also apply.
It involves the State and participating banks paying up to 30% of the cost of your new home in return for a stake in the home. If you want, you can buy back the stake at any time, but you don’t have to.
Your income is not assessed for the scheme, meaning people of all income levels can apply for the First Home Scheme.
Conditions for the First Home Scheme
There are some conditions associated with the scheme. If you are already using the Help to Buy Scheme, you can only get 20% of the market value of the house.
You must also have a deposit of at least 10% of the property’s purchase price. If you have a home abroad or previously inherited a house, you won't qualify as a first time buyer.
If you are buying the property with someone else, they must also be a first-time buyer or ‘fresh start’ applicant. The property has to be a newly built home in a private development, as the support scheme unfortunately does not cover second-hand homes or self-builds.
How much does your house need to be worth?
To claim the First Home Scheme, your new home must cost less than the price limit for your local authority area. In Dublin city, Dun Laoghaire-Rathdown, Fingal, and South Dublin this is €475,000 for houses and €500,000 for apartments.
It's important to note that the mortgage for your new home must be with a lender that is participating in the scheme. At the moment, these are Bank of Ireland, Permanent TSB and Allied Irish Bank which includes AIB, Haven Mortgages and EBS.
The usual rules related to mortgages also apply. Most first-time buyers can borrow four times their gross annual income.
To see if you are eligible to apply for the scheme, visit the First Home Scheme website.
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