Affordable housing

Affordable housing

Affordable housing aims to help lower income households to buy their own homes. 

It allows lower-income house buyers the chance to buy newly constructed homes and apartments in areas where property prices have created an affordability gap. These properties are then offered for sale to eligible first-time purchasers at prices significantly less than their actual market value.

Click here to view some affordable homes currently available.

Mortgages for affordable homes

The houses can be bought with a mortgage provided by the local authority. Some banks also provide mortgages for affordable homes. The loan can be up to 97% of the price of the house, subject to repayments being no more than 35% of the household net income. Net income is your income after tax and social insurance (PRSI). Some private lenders have affordable housing mortgages. However such mortgages will generally offer up to 97% of the purchase price and may not have maximum limits (unlike local authority loans which are capped at €220,000). Applicants for private sector affordable mortgages must be pre-approved by their local authorities for a suitable property.

Mortgage Subsidy Scheme

If you get a mortgage from the local authority and your gross household income is less than €28,000, you will be entitled to a subsidy that will reduce your mortgage payments. This subsidy will be paid directly to the local authority. The subsidy is between €1,050 and €2,550 per year.

A household that does not qualify for this subsidy may instead qualify for the Mortgage Allowance Scheme. 

Types of affordable housing

The local authority uses three different ways to provide affordable housing. They are as follows:

• Affordable Housing Scheme
• Part 5 of the Development Acts 2000-2002
• Affordable Housing Initiative under Sustaining Progress 

You may be eligible for housing provided under all three. When you apply for affordable housing your local authority will assess you for the different housing options that become available. Most affordable homes are now provided under Part 5 of the Development Acts 2000-2002 and the Affordable Housing Initiative. 

Affordable Housing Scheme

Under the Affordable Housing Scheme the local authority provides land on which new houses are built and sold. If there are more eligible applicants than houses, the local authority will determine the order of priority, taking account of household circumstances, etc.

You qualify for the Affordable Housing Scheme if :

• You are in need of housing 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, or
• You are a tenant for more than one year of a home provided by a housing association under the Capital Loan and Subsidy Scheme and you want to buy a private house and return your present house to the housing association.

The income test only applies to people mentioned in the first bullet point; if you are covered by the second, third or fourth bullet points, you are exempt from the income test. However, all applicants must have enough income to meet their mortgage repayments after paying other bills.

The income test

• Single income household: If your gross income (before tax) in the last income tax year was €40,000 or less, 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 or less, you are eligible.

Some local authorities may have lower or higher income limits than others. This is because the cost of housing is more expensive in some areas than others.

Part 5 affordable housing

Part 5 of the Development Acts 2000-2002 allows a local authority to require developers to set aside up to 20% of new developments of five or more houses for social or affordable housing.  The local authority will decide how much (if any) of the 20% will be affordable, social, voluntary, housing etc. This is determined in consultation with the developer, taking into account the appropriate percentage in the development plan.

There are no rules about where affordable houses should be located in new developments. It is for the local authority to decide which homes should be designated as affordable housing, as appropriate. For example the affordable houses may be peppered through the development/estate or may be grouped in pairs, in areas, etc. The proximity of these homes will all depend on what the local authority approve as most appropriate for the area and most appropriate for the residents of these homes.

Eligibility for Part 5 affordable housing

You are eligible to buy an affordable house provided under Part 5 of the Planning and Development Acts 2000-2002 if 35% of your income is not sufficient to enable you to buy a house.

Affordable Housing Initiative

The Affordable Housing Initiative (AHI) was introduced under the Sustaining Progress agreement. Under this initiative the Office of Public Works provides land on which new houses are built and sold.The AHI is meeting the needs of those who would formerly have been able to purchase a house, but now find themselves priced out of the market. 

Eligibility for Affordable Housing Initiative

You are eligible to buy an affordable house provided under the Affordable Housing Initiative (AHI) if 35% of your income is not sufficient to enable you to buy a house.  

Selling your affordable house

If you sell your house within 20 years, you will have to pay the local authority a percentage of the proceeds of the sale. This percentage is expressed as the percentage difference between the sale price and the market value of the house. This amount will be reduced by 10% each year after you have owned your home for 10 years. So, if you sell your home after 20 years, you will not have to pay anything to the local authority.

The market value at the time of selling your affordable home is used to calculate the proceeds of the sale due to the local authority. If the gap between the original sale price and market value has narrowed, the amount due to the local authority will also reduce. If the proceeds of the sale of your affordable home is below the initial price actually paid, you will not be liable to pay the local authority a percentage of the proceeds of the sale.

The Affordable Homes Partnership provides examples showing you how to calculate the proceeds of the sale due to the local authority.

How to apply

Applications for affordable housing under are made to your local authority.

Click here to find out more about affordable housing provided by your local authority. Your local authority will decide which affordable housing development you are eligible for.

You may be required to supply the following information with your application:

• A current payslip from your employer
• An Income tax form (P60) or a PAYE balancing Sheet (P21)
• Other documentation that may be requested by the local authority.

You may also be requested to submit a letter from your employer confirming that you are a permanent employee. For self-employed people, you may be required to submit audited accounts for the previous three years.

If you are currently living in rented accommodation, you may have to produce a statement of your weekly rent signed by the landlord or you can submit a copy of your rent book with your application.

Further information

For more information contact the Affordable Homes Partnership.

The Affordable Homes Partnership is a Government agency responsible for promoting affordable housing.

They have developed a booklet explaining how to go about getting an affordable home (pdf).

They can be contacted at