🎙️ The Tea & Mortgage Podcast #31 – Help to Buy Scheme Explained

00:00 – 0:03 Norman Schriever

Hey, everyone.  How’s it going?  Norm Schriever here with John Coleman for the Tea & Mortgage Podcast, No 31. John.

00:04 – 0:12 John Coleman
Stop right now. It’s catching up with my age, Norm, at this point.  Yeah. Yeah. Great to have everyone here. And, um, hopefully there’ll be some value that we’ll give today as always.

00.13 – 00:23 Norman Schriever
Yeah, absolutely. We’ve got a great topic today that a lot of people are searching and interested in, and that is the Help To Buy Scheme here in Ireland. So do you want to do a quick little 10,000 foot view introduction of it?

00:24 – 00:36 John Coleman
Well, this is a video or this is information that I had put out before where it was initially only €20,000 that the government would give. So that video is outdated at this point. So I felt it was time you and I brought it back up to date, but, um, it’s, it’s, I think it’s a great scheme.

Um, but we’ll discuss the pros and cons.  As we go, there are some things that I think people need to know from an overall view that we would probably tease out as we, as the conversation moves forward.

00:37 – 01:10 Norman Schriever
Great. Great. Well, I have a list of questions if it’s okay with you and I’ll go down the list just because

01:11 – 01:17 John Coleman
Actually, sorry for coming across you buddy. Um, I think it might be worth giving a rather specific question. Maybe I’ll start by answering, is it good, is it a good thing the Help To Buy Scheme and maybe kind of give that, that sense of it, right? Because this is the way I would describe this to anyone. I talked about it on an individual, individual basis. The Help To Buy Scheme is great to help people with the deposit.

Okay. So if you don’t have any money or you don’t have access to a gift, the Help To Buy Scheme is amazing, but I missed the point I need to make. I always make, and I’d say it doesn’t feel as if you don’t, if you don’t need the Help To Buy, it doesn’t mean you’re losing €30,000 by not buying a new property.

Okay. The way I explain this to people is the money to Help To Buy money. It’s in the price of the property. Okay. So hypothetically, you buy a property today, brand new, and you get your €30,000. Okay. You try to sell that house the next day. It’s only, you’re only getting €470,000 first because the house next door to it, which is new, has the €30,000. So it’s built into the price. Now over time, it basically it’s, um, you’ll get the value of it over time. And it means you’re not having to put your own money into it. So there’s huge value, but the concept of, Oh, if I don’t buy a new property, I don’t get this €30,000 is slightly misaligned in my opinion.

01:18 – 02:25 Norman Schriever
Um, it’s not free money that they’re giving out to someone else to get in line.

02:25 – 02:29 John Coleman
Right. Yeah.

02:30 – 02:50 Norman Schriever
You pay for it somehow.

02:51 – 03:12 John Coleman
Yeah. But it’s great to help people with the deposit. I’m not having to see where the hell am I going to come up with €30,000. And in a slight way, back of God’s back when the crash

took place in 2008 to then there were banks at the point we’re lending, um, 100% mortgages back in the day.

03:13 – Norman Schriever
Right.

03:14 – 03:36 John Coleman
And in a strange way, this is money that allows like the moment that Central Bank rules are 90%. This is the kind of, uh, a way around that, if that makes any sense to slightly, um, make it, um, that you’re, you’re able to borrow more money in effect, you’re getting, you’re not borrowing more money, but it is in the price and it’s all you’re doing is getting back what you paid for in tax.

03:37 – 03:48 Norman Schriever
Yeah. And the big thing, like you said, is the deposit. And that’s the big number, you know, a lot of people could afford the payments. A lot of people could afford the house. They just, that deposit is a huge number to come up with. So that definitely helps. Right.

03:39 – 04:47 John Coleman
And on that basis, I think the Help To Buy has been amazing and it’s been really, really successful, but there are people who use the Help To Buy who don’t need it. Right. And if they have, which, um, I think there’s figures out there that 70% of the people who buy new houses wouldn’t have actually needed, um, that’s quite a high percentage.

So there’s all sorts of kind of political debate around the rights and wrongs, or are there better schemes?  Are there better ways of helping First Time Buyers? But in the main, I think it’s worked. Um, and I think it’s helped a lot of people. So I wouldn’t be, I wouldn’t be changing it. What’s happened over time.

I’m kind of talking on a general, the limits that is €500,000 is the maximum price and €30,000 is the maximum money that you can get, but that €500,000 as a ceiling of price is probably from 3 or 4 years ago. Now the prices have gone up. So the value of the scheme or the benefit of the scheme isn’t, it’s been, and no one really, I’ve never heard anyone make this point, but it’s been kind of, um, reduced with the passing of time. Right.

04:58 – 05:06 Norman Schriever
Because it gets, it gets watered down a little bit as it used to be a higher end home.  And now it’s sort of right in the middle, huh?

05:06 – 06:03 John Coleman
Are there not for people in Dublin are basically suddenly the can’t, there’s no houses for €500,000 in Dublin.  So they’re having to go outside Dublin. So it’s not a point I’ve ever heard anyone make, but for me, I’ve noticed it in terms of, well, this €500,000 limit.

Um, so there’s always a kind of, in Ireland, we have a budget every year and there’s always a, or will they extend the Help To Buy? And it is extended for another to the end of next year. Um, and I’m sure it will be extended again, but at some point the question is always, will they keep it? Will they, won’t keep it. But I haven’t had anyone lobbying to try to get the actual, the value of the price range increased, which personally, I think it should be to maintain the value of the, um, of the offering that was made €500,000 in Dublin would have bought your very nice house in Dublin four or five years ago. Now you can’t get a new house for that price in Dublin are very, or very few. And you’re having to move outside Dublin, you know.

06:04 – 06:47 Norman Schriever
You know, that’s a good point you make with them, not actually adjusting even yearly. And you’ve heard of FHA loans, Federal Housing Administration loans in the U S right. Or maybe not. And it’s not, they don’t lend money. They’re a government organization that ensures other lenders. And so it’s a safe bet for lenders. And so it’s a great loan for first time buyers, but they actually update it every year.  They have different income, uh, different price or lending thresholds, I should say. And it varies by county. So for instance, if you’re in the middle of Arkansas, prices might be $200,000. In the middle of California, you know, it might be $800,000 for the state. So it’s actually appropriate for where you live in the price.

06:48 – 07:09 John Coleman
If you remember our last conversation on the First Home Scheme, that’s slightly graded on a location by location basis. It’s up to €475,000 in Dublin, but other areas it’s €425,000. So there is a, but that’s for the first home scheme, but I think there’s value in what you’ve said, um, about attributing that to the Help To Buy Scheme as well. Um, because well, in, in, in real terms, the value of it as an offering has dwindled with the passing of time, you know,

07:10 – 07:24 Norman Schriever
And so we covered up, you know, what it is, which is basically, you know, uh, help with the down, the down payment.

07:25 – 08:41 John Coleman
I’ll give, I’ll go in more, into more detail. I would kind of just give you a very much, uh, sort of an overview there. And did I feel it was worth it basically just to kind of get into the nuts and bolts of what the Help To Buy Scheme it’s, um, it’s a refund of the taxes that you have paid in the four previous years. So we’re in 2025 now. So it’s the tax that you paid in 2024, 2023, 2022, and 2021. Okay. So, um, it’s done on a combined basis. If you’re doing it on a joint as a joint application, you need to apply jointly. You don’t apply separately. You apply jointly. And the maximum is €30,000 as things stand. And that’s what we were just talking about, the maximum price is €500,000. And it has to be for a new property, a new property only. So that’s the sort of the nuts and bolts of what the Help To Buy is. It’s, it’s a refund of the tax that you paid. So hypothetically, you’ve just come into the country, right. And you want to buy a new property. Well, there’s no value in that from the still value of buying a new property, because you’re not having to get into bidding wars with people, but for the, getting the Help To Buy funds.

08:42 – 08:44 – Norman Schriever
There’s no taxes to refund.

08:45 – 08:54 John Coleman
So, um, people need to be aware of that. And, the mistake people sometimes make is right. We’re we’re we’re in July now. Um, we are in July. I think so.

 08:55 – 08:59 Norman Schriever
I don’t know what year it is, but I know it’s July.

09:00 – 10:14 John Coleman
Um, they, people will be saying, well, I paid, okay. They might’ve come into the country last year and they paid a full year’s tax. And then they paid six months tax this year. This year doesn’t count because it’s not this year. What I would say to, if I’m, I’ll be having conversations with people now and I’ll be saying to them, okay, you’re buying a new property and it’s probably going to take six months to nine months to be built.
Okay. So you actually could still potentially increase the amount you qualify from the Help To Buy, because it will be next year. So then you’ll have all the tax that you paid this, this year. Um, so that is a little nuance for people to keep in their, their mind.

Okay. I might, I only qualify for €15,000 now, but there’s always a time lag between when you actually agreed to buy a house and what time I’m ready. So if it moves into next year, then suddenly you’ve got another year’s tax and, um, to pay for, but there’s, there’s a counter argument on that. Obviously you’ll get more Help To Buy, but then you’ll have spent more money in rent, you know? So it’s, um, it works both ways. But at least you’re getting some hard cash rather than you still have to pay your mortgage. So, um, there is value in, in the fact that you will qualify for more, if there’s a, if there’s a, if you move into a new tax period, basically, you know,

10:15 – 10:23 Norman Schriever
So, and that’s, that’s a good point. Cause I have a question about that, about timing. So like, When do you apply for this Help To Buy Scheme and, and How does someone Apply?

10:24 – 12:24 John Coleman
Right. Well, it’s through the revenue. Okay. Everyone will have their own Revenue account. And when I send out my, our, um, our Roadmap, we’ll always include a link to the Help To Buy. Um, I, I’m of the view that people should apply as soon as they’re thinking of buying a house. Right. Um, yeah, because people, people always say to me, oh yeah, no, I definitely paid €30,000 in tax. Right. And I said, well, listen, you may think that the revenue or our God in this process. Right.  So you need to talk to them first. Cause I’ve had people come back to me that, oh, I actually owe the revenue money, right. And they won’t. Like they have control here.

There. If you, if for some reason you are underpaid some tax on some, for some reason, you’ll have to square that off before they tell you what you, what you’re quantified for. So I think, and obviously people always put it off because they’re not ready to buy a house, but then when they’re ready and they’re, and then somebody want to buy a house and they haven’t applied for this, if the revenue or have, um, logs are, are too many people looking for the Help To Buy at the same time, you could be waiting three or four weeks to hear back from them. Right. So I would say as soon as, as soon as you start thinking about, you’re going to buy a home and in particular, if you want to buy a new, just apply and then, well, there’s no, there’s no pressure on it. It’ll go through the system and you’ll, and you’ll have that figure one, it’ll either A confirm what you believe you should get, or B it’ll crystallize where you actually are and what you might need to do at a, at a given point in time.

Um, because if you think about it, everyone, there’s always a big rush come January, right? Yeah. Okay. Well, we want to buy a new home. We’re into a new tax year and then suddenly they’re applying and then they haven’t, they’re waiting for 6 weeks, 8 weeks. Uh, um, so get, get approved as quickly as possible. So, you know, where you stand, if you’re thinking of doing it next year, apply on the 1st of January. So you’re getting yourself to the top of the queue, you know.

12:25 – 12:41 Norman Schriever
That’s great. Yeah. And I know a lot of people when they start to, they have questions like how is Help To Buy Scheme calculated and how do they claim the Help To Buy and like, how do they qualify and all these things? So do you actually assist in the process since you’re maybe doing their mortgage or is it just point them in the right direction?

12:42 – 13:18 John Coleman
Point them in the right direction, Norm. It is, uh, um, and sometimes I’ve kind of feel like I have a duty of care to make, to sort of ground them in their expectations because I, you know, I’ll definitely qualify for €30,000 and I’m kind of go, okay, well, I’ve had many people say that to me and they come back and say, I only qualify for X.  And it’s, it’s just, it’s really, really important revenue, don’t bite, and they’re very, very good. So get applying. It’s, it’s quite a simple process. Um, and there is a link that we always send out. So anyone can always just get in touch with, with send them in the right direction. But it’s, it is based on the tax they paid in the 4 previous years, so at the same time.

13:19 – 13:31 Norman Schriever
But you’re involved before the process, then they apply and you’re in conversations with them. And as soon as the revenue gets back, you say, okay, let’s, let’s look at what you got.

13:32 – 13:55 John Coleman
And then plan accordingly. Right. So do you, do you start, okay. You say you qualified for €25,000 this year. Would you, I’d be saying to you, well, listen, you could still buy a house   now that’s not going to be ready till next year, because you’re going to have made up the difference in the tax that you paid this year. So there, there’s, there is some fine tuning. But getting in touch with revenue, finding out where you stand right now is key in the process, you know?

13:56 – 14:11 Norman Schriever
And out of all your clients who are buying, how many or what % do you think actually want to help the buy scheme when they first walk in the door and how many actually, actually use it and actually get the money and it’s, it’s of service and they get approved.

14:12 – 15:09 John Coleman
Great question. Um, there’s like, obviously from a first time buyer, the concept out there of free money in a way is out there. The concept of €30,000 free money. So that’s a very appealing concept. So you certainly have a very high % of first time buyers will be of the view that they should be using the Help To Buy Scheme. Not, not 100%, but certainly a high %, but then remember what we were discussing earlier, some of them, like buying a house and then using your first choice, your first thought is where do I want to live? Okay. And so the locations where you might want to live, there may not be any new houses being built or they may not be available. So it might dismiss it as an alternative or as I was saying as well, the value of the Help To Buy has diminished recently in that the prices have been going up, but the limit to which you can use the Help To Buy hasn’t, hasn’t decreased at all.

15:10 – 15:15 Norman Schriever
So you’re saying if it’s €500,001, they can’t use Help To Buy.

15:16 – 15:17 John Coleman
Correct. Yeah.

15:17 – 15:34 Norman Schriever
So I do a lot of, if people are in that range, if you were a seller, I know this is all right, new homes, it’s not sellers, but do they actually purposely price? A lot of them, if it’s anywhere near, they price them at €500,000 or less just because they know it’s going to be absolutely for people.

15:35 – 15:52 John Coleman
Yeah, absolutely. But when supply and demand create a situation whereby, well, people will pay more than €500,000, well, the developer isn’t in it for the first time buyer, he’s in it for, for his own.

15:53 – 15:57 Norman Schriever
And there’s no shortage of buyers. There’s, I mean, triple the demand versus the supply these days.

15:58 – 16:30 John Coleman
So, yeah. So in real terms with the way the prices have gone, um, that the point you make the observation you make about being, so a house might really only be worth €450,000 but we could price it at €500,000 because people will think they’re getting the 30,000. That may well have been a thought process in the developers, maybe 2 or 3 years ago. But now the demand versus supply has obviously the prices have increased. I don’t believe they’re having to, if the supply and demand that they’re just pricing it at €520,000, €530,000, and the Help To Buy doesn’t become that.

16:31 – 16:54 Norman Schriever
They’re not worried about it. They don’t benefit from it and they don’t need more, more traffic. They have enough. Yeah. That’s interesting. Um, yeah, that’s interesting. And, and other than owing the revenue, some back taxes, or like you said, it’s a, someone who just emigrated to Ireland and they don’t have a tax history of 4 years, are there some mistakes or something.

16:55 – 17:03 John Coleman
By the way, just to make a comment there? You don’t need to have been working in Ireland for 4 years. So it’s not as if you won’t qualify.

17:04 – 17:05 Norman Schriever
Have that tax credit for, for years.

17:06 – 17:20 John Coleman
You didn’t work earning a lot of money. Um, so some people are earning a lot of money, will have paid tax quicker. We’ll get the €30,000 in a quicker timeframe, but yeah, it’s not a case that you have to be here for 4 years and they will only calculate on the tax that you paid in the last 4 years, basically, you know, gotcha.

17:21 – 17:42 Norman Schriever
Yeah. Thank you for clarifying. And like, I was just wondering if there’s some common mistakes, one common misconception that you said was like, people think it’s free money. Buyers have that misconception, but are there other mistakes with applications waiting too long or something people do wrong.

17:43 – 18:10 John Coleman
With commonly making the assumption that they qualify for the full €30,000, right? But for me, that’s the biggest mistake. It’s, it’s more, ah, yeah, well, I’ve been paying lots of tax and not definitely qualified for €30,000. And I’ll, I’ll apply for this when I need to apply right now, it takes 5 minutes to apply. So it’s not, it’s not a, it’s not an onerous task, but it’s like, we’re all human beings. If I don’t need to do it now, I won’t do it now often. And then suddenly they do it. And then, oh my God, tax man is saying I owe them a couple of hundred bucks or €s, sorry, your influence had me saying bucks..

18:11 – 18:19 Norman Schriever
Hey, I’m on €s now too, I’m in Spain now, and right now I’m organising and filing my first taxes. It is not fun. So, uh, yeah.

18:20 – 20:39 John Coleman
um, the, what was I saying? Sorry. You, yeah, I got through myself there, but in real terms, the, um, that, that would, and then just not applying quickly enough. Right. And some of the banks are very, and this is where it becomes, it becomes a red tape issue or a problem for them, um, with an application and that they don’t have enough savings, right? They haven’t got their approval from the Help To Buy, but they want to buy a house tomorrow. Right. And the bank are saying, well, where’s the money coming from?

And you can’t actually demonstrate where the money comes from. So it, it, it can become a real, real problem for people whereby they’re trying to buy a house. They can’t get the bank to say yes. And they’re waiting on revenue who at the time they’re applying, maybe have an inundated or inundated with applications. So there’s now are revenue  good. If you’ve agreed to buy a house, you can’t, there is a way of actually potentially fast tracking, um, your, your, your way up the system. If you’ve agreed to buy a house and this is a mistake people sometimes make it.  The process is, is, is as follows with revenue, you apply and they give you an amount and an access code. Okay. They don’t ever give you the money. Okay.

Um, the human, the individual never gets the money, but you get a code and an access code, right? And that basically would be what would be supplied to the bank and the bank are okay, they’re good for €30,000. Okay. You then find a home. This is how the process works. When you find a home, the bank would then give you a loan offer, which you would in conjunction with your solicitor, update the loan, you would give them the revenue, the loan offer with the access code, etc, that would then go to the developer, the code, the loan offer on the con would go to the revenue. And it’s only at that point that the revenue will pay the developer. You never get the money. It just goes directly from the revenue. So people kind of think, well, how do I get my money? Right. So that concept is the Help To Buy. You don’t get the money. You get, you get told by the revenue, how much they will give. And basically the funds then go directly from the revenue to the, um, to the seller.

20:40 – 20:48 Norman Schriever
And that’s probably a good thing. Cause a lot of people would be like, Ooh, let me go to the casino and double it. Or, uh, let me pay off these credit cards or take a vacation or something. Right.

20:49 – 21:10 John Coleman
Well, I’m not convinced about that, but that’s the process that it operates on, it works very well, but the human beings, this is my money. Why am I getting it? Um, and they just see a code and an amount. They think they haven’t got it. And you, you have got it. You down, you down now, you now need to find a home.

21:11 – 21:33 Norman Schriever
Yeah. Gotcha. Yeah. And when someone comes to you, I know you help a lot of first-time buyers and home buyers and they come to you and part of what you do is customise a really great Roadmap with every based on their very specific situation, every step they need along the way to get this mortgage. Um, of course, this helped to buy scheme and pointing them in the right direction as part of that process. Correct.

21:34 – 22:00 John Coleman
Absolutely. There’s a link that we send out with the roadmap that just brings you directly to your own, to the revenue and then you, you, you apply that way. Um, obviously we’d love to be able to do it, but revenue wouldn’t talk to us on their behalf. They need, that’s something they would only talk to the individual themselves on, you know, so we, and we’re not qualified to give tax revenue advice either, by the way, and we wouldn’t, we wouldn’t be allowed under our license, but we definitely can point people in the right direction.

22:01 – 22:18 Norman Schriever
Right. Yeah. Well, you answered a lot of questions and really covered well to Help To Buy Scheme. And if people have more questions, we’ll actually put a link in this YouTube description or on social media where they can find the Revenues website. And then any other mortgage related questions that could come right to you, John. So thank you for the info.

 

22:19 – 22:32 John Coleman
Not a problem. This is well overdue because I had done one a long time on the Help To Buy ages ago. And we definitely needed to update it. So thank you for making this suggestion. And, uh, hopefully we’ve covered everything today. I feel we have.

22:33  – Norman Schriever
Wonderful.

22:34 – John Coleman
Yeah.

22:34 – 22:50 Norman Schriever
And Hey, everyone out there. Thanks so much for your support with the Tea & Mortgage podcast. We have fun with it, but the some really great information, John helps a lot of people. So if you’re in Ireland, if you’re looking to buy and need a mortgage, John Coleman at JC Mortgages, and thanks again for your support with the Tea & Mortgage podcast.

22:51 John Coleman
Thanks all. Thanks.