Incremental Tenant Purchase Scheme for existing local authority houses

This is a scheme for the purchase of existing local authority houses.

If you are a local authority tenant (i.e. a tenant of a city or county council) living in a local authority house, that is available for sale under the scheme and you meet the eligibility criteria, you can apply to purchase your house.

There are a number of types and uses of houses not eligible under the scheme, such as:

• apartments - a separate purchase scheme for apartments applies
• houses that have been specifically designed for occupation by elderly persons
• houses that have been specifically designed in a group setting for occupation by members of the Travelling community
• caravans, mobile homes or structures capable of being moved by whatever means
• houses in a private development transferred to the local authority by the developer (otherwise known as Part V properties, as they were transferred to the local authority under Part V of the Planning and Development Act 2000)

Your local authority can tell you if your type of property is included in the scheme.

If you are a local authority tenant living in a local authority house included in the scheme you can apply to buy the house. Applicants must have a minimum primary reckonable annual income of €11,000 and be in receipt of social housing supports for at least 10 years. In the case of joint applications, one of the two tenants must be in receipt of social housing supports for at least 10 years, as determined by the local authority in accordance with the rules of the scheme.

Social housing supports include Housing Assistance Payment (HAP), Rental Accommodation Scheme (RAS) or 10 years tenancy of a local authority dwelling.

You will pay the market value of the house – less a discount.

Depending on income, the discounts will vary between 40% and 60%.

In determining a tenant’s primary reckonable annual income, local authorities can include incomes from employment, self-employment and private pensions. Certain social protection payments are included for reckonable income purposes under the Scheme because they are deemed long-term payments.

Payments included for primary reckonable income purposes include:

• State Pension (Contributory & Non-Contributory)
• Widow’s/Widower’s/Surviving Civil Partner’s (Contributory & Non-Contributory) Pension
• Blind Pension
• Invalidity Pension
• Disability Allowance

Payments which can be considered for secondary income purposes include:

• Working Family Payment
• Age 80 (Pension) increase
• Rural Social Scheme

• Other social protection payments are disregarded because as they are deemed typically not to be long-term when compared with the term over which a property is purchased under the Scheme.
• Your local authority will also place a charge on your house called an ‘incremental purchase charge’. This charge will be equal to the discount you get on the price of the house.
• The charge will remain in place for 20, 25 or 30 years (depending on the discount given). Each year, the local authority will reduce the charge by 2%. At the end of the 20, 25 or 30 years, the charge will be zero as long as you obey the terms and conditions of the scheme.
• You must live in the house as your normal place of residence and get agreement from your local authority if you want to sell, let or sub-let the house.
• You will be able to resell your house at any time if your local authority agrees. However, if you sell before the end of the 20, 25 or 30 years, you will have to pay back the value of the outstanding charge on your house to your local authority.
• Like all homeowners, you will be responsible for maintaining and carrying out repairs on your house from the date you buy it. You will also have to purchase property insurance for your house as a condition of the purchase – and pay for this insurance yourself.
• The local authority can refuse to sell the house in particular circumstances such as to tenants or household members involved in anti-social behaviour or with rent arrears.

The Housing (Sale of Local Authority Houses) Regulations 2015, sets out the conditions for the sale of local authority houses. This was amended by the Housing (Sale of Local Authority Houses) (Amendment) Regulations 2023on 11 December 2023 and the changes came into effect on 29 January 2024.

To apply:

• fill out a Tenant (Incremental) Purchase Scheme application form which you can get from your local authority
• give proof of your annual reckonable income
• show your local authority how you intend to pay for the house
• give the local authority any other information it asks for about your application

You must apply to your relevant local authority. The financing of the purchase of the house is a matter for the tenant. However, you may qualify for a Local Authority Home Loan, which is applied for separately.