Local authority home improvement loans

Information

Local authority loans are available to owner-occupiers in Ireland for the carrying out of necessary works to improve, repair or extend their existing houses.

You are entitled to tax relief on the interest of such loans.

Rules

You may be eligible for a local authority home improvement loan if you can show the local authority that you cannot get a loan from a bank or building society and:

• Your house needs improving, repairing or extending due to overcrowding and your income satisfies the income test below, or
• You are registered on a housing waiting list with a local authority, or
• You are a local authority tenant or a tenant purchaser and you want to buy a private house and return your present house to the local authority,
• You are a tenant for more than one year of a home provided by a housing association under the Rental Subsidy Scheme and you want to buy a private house and return your present house to the local authority.
• Note that the income test only applies to the first category; if you are covered by the second, third or fourth category you are exempt from the income test.

The income test

• Single income household

If your gross income (before tax) in the last income tax year was 40,000 euro or less(from January 2006 previously the limit was 36,800 euro), you are eligible.

• Two income households

Multiply the gross income (before tax) of the higher earner in the last income tax year by 2.5 and add the gross income of the other earner in the last income tax year. If the answer is 100,000 euro or less (from January 2006 previously the limit was 92,000 euro), you are eligible.

Rates

The maximum improvement loans are:

• 38,000 euro (or 50,000 euro on offshore islands) - or
• 15,000 euro where there is no mortgage.

The interest rate on these loans is the same as for house purchase loans. However, mortgage protection insurance is not provided on home improvement loans.

How to apply

In order to apply for a local authority home improvement loan in Ireland, you will need to get in touch with your local authority. You will be required to complete an application form and may be required to show evidence of recent payslips, etc.