Revenue Note for Guidance

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Revenue Note for Guidance

266A Repayments of appropriate tax to first-time buyers

Summary

This section provides for refunds of Deposit Interest Retention Tax to first-time purchasers and in respect of “Self-built” properties built by first-time purchasers.

The repayment of DIRT will only be made to eligible first-time purchasers on the conclusion of the conveyance of the property into the name of the first-time purchaser during the period of the scheme

In relation to “self-built” properties built by first-time purchasers, repayment of DIRT will be made only where the dwelling has been completed to a standard where it is suitable for immediate occupation as a dwelling.

Relief is confined to DIRT paid on savings, up to a maximum of 20% of the purchase price of the house or apartment, in the 48 months prior to the purchase date.

This section has effect from 14 October 2014 and will be in place until 31 December 2017

Details

Definition

(1) “completion value” in relation to a dwelling, means the price which the unencumbered fee simple of the dwelling might reasonably be expected to fetch on a sale in the open market were that dwelling to be sold on the relevant completion date in such manner and subject to such conditions as might reasonably be calculated to obtain for the vendor the best price for the dwelling and with the benefit of any easement necessary to afford the same access to the dwelling as would have existed prior to that sale;

“first-time purchaser” means a person, being an individual who, at the time of a relevant purchase or on the relevant completion date, as the case may be, has not, either individually or jointly with any other person or persons, previously purchased or previously built directly or indirectly on his or her own behalf any other dwelling;

“relevant completion” means the completion of the construction of a new dwelling, on or after 14 October 2014 and on or before to 31 December 2017, to a standard where it is suitable for immediate occupation as a dwelling and the dwelling —

  1. has been built directly or indirectly —
    1. on his or her own behalf by a first-time purchaser only, for occupation as his or her place of residence, or
    2. on their own behalf by more than one person, where each such person is a first-time purchaser only, for occupation as their place of residence,
    and
  2. is constructed on property conveyed or transferred, on or before 31 December 2017, into the name or names of the first-time purchaser or first-time purchasers only, as the case may be;

“relevant completion date” means the date on which the dwelling becomes suitable for immediate occupation as a dwelling;

“relevant purchase” means the conveyance or transfer of a dwelling on or after 14 October 2014 and on or before 31 December 2017—

  1. into the name of a first-time purchaser only, for occupation as his or her place of residence, or
  2. into the names of more than one person, where each such person is a first-time purchaser only, for use as their place of residence;

“relevant savings” means —

  1. in the case of a relevant purchase, so much of the aggregate amount at any time of any relevant deposits held in the name of a first-time purchaser, individually or jointly with another first-time purchaser only, as does not exceed 20 per cent of the amount of the consideration paid in respect of the relevant purchase by the first-time purchaser, or
  2. in the case of a relevant completion, so much of the aggregate amount at any time of any relevant deposits held in the name of a first-time purchaser, individually or jointly with another first-time purchaser only, as does not exceed 20 per cent of the completion value of the dwelling;

“relevant savings interest” means relevant interest paid —

  1. in the case of a relevant purchase, at any time during the period of 48 months ending on the date of the relevant purchase by a first-time purchaser, to the first-time purchaser in respect of relevant savings, or
  2. in the case of a relevant completion, at any time during the period of the 48 months ending on the relevant completion date, to the first-time purchaser in respect of relevant savings;

(2)(a) Subsection 2(a) provides that despite the general prohibition in section 261(b) on repayments of DIRT (except for companies within the charge to corporation tax in respect of relevant interest), repayments of DIRT deducted from relevant interest may be made to a “first-time purchaser”.

(2)(b) Subsection 2(b) seeks to ensure that D.I.R.T. refunds are not claimed more than once under the provisions of the Tax Acts.

Relevant Date: Finance Act 2021