Are you dreaming of owning your first home in Ireland? The First Home Scheme is a government initiative designed to help first-time buyers achieve that dream. This blog will guide you through the key features, eligibility criteria, application process, and benefits of the scheme. Plus, we’ll compare it to other countries and previous homeownership schemes. So, let’s dive right in!
Key Features of the First Home Scheme
The First Home Scheme is a government-backed initiative aimed at providing financial assistance to first-time homebuyers in Ireland. It offers a variety of benefits, such as reduced deposit requirements, lower interest rates, and the possibility of obtaining a mortgage guarantee.
Here’s how it works :
- Deposit Requirement: First things first, you need to have saved at least 10% of the property value as a deposit. In this case, for a €300,000 home, you would need to have saved €30,000 yourself.
- Shared Equity: Under the FHS, the State would help you pay for the home by contributing up to 30% of the cost. For a €300,000 home, this means they would contribute €90,000. This helps reduce the amount you need to pay upfront and the mortgage repayments you have to make, making the home more affordable.
- Equity Stake: The State would hold a 30% equity stake in your home, equivalent to their €90,000 contribution. However, this doesn’t affect your rights and responsibilities as a homeowner. You will still live in the home, manage it, and make decisions related to it as you wish. Their stake is a financial interest that only comes into effect when you decide to sell the home or buy back the stake.
- Buyback Option: At any point during your home ownership, you can choose to buy back the equity stake. If your financial situation improves, you can buy back the 30% stake, or €90,000, that the State hold in your property. This means you would become the full owner of your property. But remember, this is optional – you are not required to buy back the equity stake.
- When You Sell: If you decide to sell the home and you haven’t bought back the equity stake, the proceeds from the sale will be divided according to the ownership percentages. For example, if you sell your home for €300,000, the State would get 30% of this amount, or €90,000, since they own 30% of your home. The remaining €210,000, or 70%, would be yours.
Eligibility Criteria
To qualify for the First Home Scheme, applicants must meet specific criteria:
Age Requirements
The minimum age to apply for the scheme is 18, while there is no maximum age limit.
Income Requirements
Applicants must have a combined annual income of no more than €75,000 for single applicants or €150,000 for joint applicants.
Property Value Limits
The maximum value of the property you can purchase under the scheme depends on the location. In general, the maximum property value is €320,000 in the Greater Dublin Area, Cork, and Galway, and €250,000 in the rest of Ireland.
How to Apply for the First Home Scheme
Once you’ve determined your eligibility, it’s time to apply for the scheme.
Online Application Process
The application process is entirely online. Visit the First Home Scheme website https://application.firsthomescheme.ie/main and complete the online application form. You’ll be asked to provide personal and financial information, including details about your income, employment, and the property you wish to purchase.
Necessary Documentation
Before submitting your application, ensure you have the necessary documentation, such as proof of identity, proof of income, and details of the property you wish to buy.
Benefits of the First Home Scheme
The First Home Scheme provides numerous benefits to first-time homebuyers:
Affordability
The scheme helps increase affordability by reducing deposit requirements and offering lower interest rates on mortgages. This allows more people to enter the property market and become homeowners
Economic Growth
By encouraging homeownership, the scheme contributes to economic growth in Ireland. It stimulates the housing market, creates jobs, and supports the construction industry.
First Home Scheme in comparison
Now that you understand the First Home Scheme let’s see how it compares to other countries and previous homeownership schemes.
Comparison to Other Countries
The First Home Scheme is similar to other homeownership initiatives worldwide, such as the Help to Buy scheme in the United Kingdom and the First Home Buyers Grant in Australia. These schemes also provide financial assistance to first-time homebuyers, making it easier for them to enter the property market. However, specific features, eligibility criteria, and benefits may vary between countries.
Comparison to Previous Homeownership Schemes
Compared to previous homeownership schemes in Ireland, such as the Home Choice Loan and the Help to Buy scheme, the First Home Scheme offers a more streamlined application process and broader eligibility criteria. This makes it more accessible to a larger number of first-time homebuyers.
Our Advice
The First Home Scheme is a valuable initiative for those looking to purchase their first home. With its range of benefits, including increased affordability and support for economic growth, the scheme is a significant step towards making homeownership more attainable for first-time buyers. By understanding the eligibility criteria, application process, and benefits, you can determine if the First Home Scheme is the right option for you on your journey to homeownership. If you need any assistance, please do not hesitate to contact us.
FAQs
Can you use first home scheme and help to buy scheme together?
Yes, you can use first home scheme in conjunction with help to buy scheme although you can only receive 20% with FHS if 10% is coming from HTB.
Is the First Home Scheme available to non-residents of Ireland?
The First Home Scheme is primarily targeted at residents of Ireland. However, non-residents may be eligible if they meet the other eligibility criteria and intend to live in the property as their primary residence.
Can I purchase a property under the First Home Scheme with a partner who already owns a home?
No, the scheme is only available to first-time homebuyers. If your partner has previously owned a home, you won’t be eligible for the First Home Scheme.
Do I need to pay back any financial assistance received through the First Home Scheme?
The financial assistance provided by the FHS does not need to be repaid. However, you will need to repay the mortgage obtained under the scheme according to the agreed-upon terms with your lender.
Can I use the First Home Scheme to purchase a second home or an investment property?
No, the FHS is designed specifically to help first-time buyers purchase a property to live in as their primary residence.
What happens if my application for the First Home Scheme is unsuccessful?
If your application is unsuccessful, you can review the eligibility criteria and ensure you meet all requirements before reapplying. Additionally, you can explore alternative options for financial assistance, such as the Help to Buy scheme or seeking advice from a financial advisor.
