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First Home Scheme [FHS]- Is it more of a hindrance than a help!

Jack Duhig from our Property Team outlines the rules of the FHS to include the process.

The First Home Scheme was launched in July 2022 and is available to first time home owners purchasing a new build or “fresh start” applicants purchasing a new build who have been adjudged bankrupt or who are divorced/ separated with no interest in the family home.

Not only does the purchaser have to qualify for the FHS, but the mortgage provider must be one that participates in the scheme and thirdly; the property itself must also qualify.

The rules vary for what properties qualify by purchase price according to County Council areas and in is recommend that you have a look at the FHS eligibility calculator on the FHS website to see what properties qualify in your area.

The FHS is different from the Help to Buy Scheme as the FHS is a shared-equity facility, whereby the State pays up to 30% of the purchase price of the property and takes a commensurate stake in the property. If a purchaser is also availing of the Help to Buy Scheme, the amount of equity that can be contributed by the FHS is reduced.

There are no charges for availing of the FHS for the fist five years, and thereafter there is a percentage charge applied each year called a service charge which gradually increases to a 2.85% charge in year 30. If after 30 years you have not bought back the equity, and you got a €30,000 facility from the scheme, you will have to pay a service charge of €855 per annum.

There are several scenarios which trigger the redemption of the equity, for example if the property is sold or if the home owner dies, where the equity share will have to be “bought back” in full. It is important to note that the FHS is entitled to a percentage share of the property’s value, so if they initially contributed €30,000 which was 10% of the property purchase price, and the value of the property subsequently doubled, the FHS is still entitled to 10% which is now €60,000, on an event which triggers redemption.

The FHS recipient does not have to wait until a redemption event to buy back the equity in the property and can do so at any point, or they can pay it back in installments of at least 5% of the original amount received. Practically speaking for the FHS applicant, your solicitor will receive the FHS legal pack around the same time that they receive the legal pack from the mortgage provider and will be able to advise on both at the same meeting. Once all documents are submitted to the FHS by the solicitor, the FHS will disburse funds directly to the solicitor’s client account in the same manner which happens with loan funds from your mortgage provider.

It is recommended by the FHS that you obtain independent financial advice as well as legal advice before availing of the scheme. The FHS has proved popular with over 800 applications so far and the initiative forms part of the Government’s “Housing for all” plan.

 *Please note that the content of this blog does not amount to professional advice. Legal advice should be sought in respect of specific queries. This update is provided on the basis of information available as at January 2023. For further information, please contact Jack Duhig/Lisa McKenna or any member of the McKenna & Co Property Team.


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Green Energy Grants Ireland | SEAI Grants | Home Energy Grants | Lower Mortgage Rates

Green Grants could help you towards a lower interest rate on your mortgage, a more marketable property and reduced utility bills – it’s a no-brainer. Becoming a more sustainable and greener community is the responsibility of us all and at McKenna & Co we take great pride in working towards this global issue with our in-office sustainability project and practices but how can we help you on this mission for a greener home.  One way to contribute is to think about how you can make your home more sustainable in your energy use. Thinking about how your home or business can be more energy efficient not only helps Ireland become more sustainable but can also helphomeowners and businesses save in energy costs, reduce your interest rate with yourlender and ultimately make your home more attractive to a potential buyer. The Sustainable energy authority of Ireland or Sustainable Energy Authority of Ireland (SEAI) offers grants to homeowners and businesses to achieve just that, and we encourage our clients to consider availing of them where they are eligible. There are a number of grants available currently depending on your criteria and eligibility. Types of Grants for Consideration Individual Energy Upgrade Grants – private homeowners and landlords One Stop Shop Service – private homeowners and landlords Fully Funded Energy Upgrade – homeowners in receipt of certain welfare payments Vacant Property Refurbishment Grant.​ Individual Energy Upgrade Grants This is a step-by-step upgrade of your home for homeowners and landlords who want tomanage their own project.  There is no minimum BER required to avail of this grant, your home just needs to be built and occupied before 2011 for insulation and heating controls and before 2021 for heat pumps and renewable systems.  By selecting this type of grant, you will manage the upgrade to include selecting the contractor, applying for the grant, managing the works completed by the contractor and following up in relation to the BER cert.  The homeowners will receive the grant once the works have been completed and grant paperwork submitted. SEAI grants Ireland available include Attic Insulation, Wall Insulation, Heating Controls, Heat Pump, Solar Thermal and Solar PV. The exact amounts available for each grant is available to view of the SEAI website along with the grant application process. One Stop Shop Service This is for homeowners and landlords looking for multiple energy upgrades, there is a minimum B2 BER required and your home needs to be built and occupied before 2011.  This grant includes the project to be managed from start to finish by the one-stop shop service to include application for the grant and a home energy assessment. The one-stop shop must be on the list of SEAI registered contractors Dublin listed on the SEAI website.  The services offered are as the individual energy upgrade grant but instead of being self-managed, this is managed by the one-stop shop. Fully Funded Energy Upgrade There is a fully funded and apart funded grant. There is a fully funded upgrade for citizensreceiving welfare allowances (a full list is available on the SEAI website). Homes eligible for the grant must be built and occupied before 2006, the home must be the applicants main residence and the applicant is receiving at least one of the welfare payments detailed on the SEAI website.  The service is managed by the SEAI from start to finish to include home energy assessment and grant application. The upgrades which are offered through the grant are attic insulation, wall insulation, lagging jackets, draught proofing, efficient lighting, new heating systems and new windows. This is particularly beneficial for those looking into insulation grants for pensioners Ireland or heating grants for pensioners Ireland. Vacant Property Refurbishment Grant. The Vacant Property Refurbishment Grant is a payment you can get if you are turning avacant house or building into your permanent home or a rental property. A grant of up to€50,000 is available. If the refurbishment costs exceed the standard grant of up to €50,000, a top-up grant amount of up to €20,000 is available. See below.  To qualify for the grant, you must: 1) have proof of ownership or evidence of active negotiations to buy the property (that is, confirmation of engagement from the estate agent or owner of the property) where you are seeking approval in principle for a grant 2)  live in the property as your principal private residence or make it available for rent 3)  have proof that the property has been vacant for at least 2 years and that it was builtup to and including 2007   Local authorities administer the Vacant Property Refurbishment Grant.   These grants offer great incentives for homeowners and business owners to commit to a more sustainable approach to their energy use. Not only does it make financial sense to avail of these as the cost of energy consumption will decrease, but it also supports Ireland’s move towards sustainability. 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 Irish Property Law

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The “Without Prejudice” to Everything Podcast is out now.

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