Revenue chases ‘handful’ of Help to Buy applicants after audit
First-time buyers who exchanged contracts before scheme started but then claimed relief will have to repay money
Revenue has identified a small number of claims where incorrect information was used in the online application system for the Help to Buy mechanism. The cases identified relate to people who bought homes from developers and not to people building their own homes, who are also eligible under the scheme.
The Help to Buy scheme offers first-time buyers of newly built homes, who have taken out a mortgage of not less than 70 per cent of the value of the property, an opportunity to claim back income tax of up to €20,000 to help defray the cost of their first property.
It was introduced in Budget 2017 but was open to eligible first-time buyers who exchanged contracts with their builder on or after July 19th, 2016. Applicants were unable to claim until an online system went live in January 2017.
It is understood all the cases being pursued by the Revenue relate to applicants who were applying retrospectively for mortgages drawn down in 2016 before the online application system opened.
In the Dáil this week, Cork North West Fianna Fáil TD Michael Moynihan claimed that a Revenue software glitch had left people facing a bill for thousands of euro.
Revenue has denied there is any problem with the online application system, describing it as “robust and working correctly”.
The system automatically rejects claims where the date entered for exchange of contracts predates the opening of the scheme in July 2016. However, a Revenue audit of the scheme found that some people who entered eligible dates had, in fact, exchanged their contracts before July 19th, 2016. That ruled them out of the scheme.
“In line with Revenue’s normal risk-based approach, targeted checks are carried out to confirm the eligibility of claims made,” Revenue said in a statement. “Where it is clear that, despite the details input by the claimant, the eligibility criteria were not in fact met, Revenue will, in accordance with the legislation, recover the amounts incorrectly claimed.”
More than 6,000 homeowners have availed of the scheme to date. It is understood Revenue has sent letters to a small number of people who were discovered to have entered incorrect data. They have been told they will have to repay any relief granted.
Up to the end of last year, the average relief granted was just over €12.500.
People found to have claimed incorrectly have three months to repay the money. Thereafter, Revenue can levy interest on the sum owing.
It is open to Revenue to penalise applicants found to have been “careless” in their application €3,000 or €5,000 where the error was “deliberate”.
However, Revenue said that in cases where a claimant was not entitled to tax relief “and provided that agreement is made to repay the amount incorrectly claimed, Revenue will, as normal take a reasonable approach to the recovery of the monies.”
Original article here