Affordable housing schemes
Affordable housing schemes help lower-income households to buy their own homes. They offer eligible first-time purchasers the chance to buy newly constructed homes and apartments at prices significantly less than their market value.
In 2021, 2 new affordable purchase schemes were announced, a local authority scheme and a national scheme. The local authority scheme is now providing affordable homes in certain local authority areas, and the national scheme is due to open in July 2022. See ‘New affordable housing schemes’ below for more information.
In 2011, the previous affordable housing schemes were discontinued. Find information below about what happens if you want to sell a home you bought under one of these schemes.
New affordable housing schemes
The Affordable Housing Act 2021 allowed for 2 new affordable housing schemes, a local authority one and a national one. Some local authorities have begun providing housing under the new local authority scheme. However, regulations are needed to set-out the details of the national scheme, which is due to open for applications in July 2022.
Local Authority Affordable Purchase Scheme
A Local Authority Affordable Purchase Scheme is available to help people on low to moderate incomes to buy homes at reduced prices. New homes under this scheme are located in areas with the greatest housing need and where affordability is an issue. The local authority has a stake in your home that covers the reduction in price. If you want, you can buy back the local authority’s stake at any time, but you don’t have to. This scheme is aimed at first-time buyers, but there are some exeptions to this.
Do I qualify for the Local Authority Affordable Purchase Scheme?
To qualify for this scheme you must meet certain income, property and residency criteria, see below.
Your income and savings
To qualify for the scheme:
- Your income must be below a certain level. This is calculated by multiplying your gross annual income by 3.5. This figure is known as your 'purchasing power' and it must then be less than 85.5% of the market value of the affordable home.
- You must have proof from a bank or financial institution that you cannot get a mortgage for 85.5% of the market value of the home
The market value of the properties is agreed by the local authority running the scheme before the scheme is launched. More detail on what is considered assessable income will be available in the Affordable Housing Income Assessment Policy.
If you have savings above a certain amount you may not qualify for this scheme. You can have the money to cover the deposit for the home and an additional €30,000. Anything above this is added to your purchasing power. And, if this goes above 95% of the market value of the home you are not eligible for the scheme.
You must not already have a home that you bought or built to live in. There are some exceptions to this for people whose relationships have ended, have lost the home because of bankruptcy or whose home is no longer suitable. For example, you may qualify if you bought a home with your spouse, but the marriage has ended and you are now applying for the scheme on your own or with a new partner.
Also, you must not already own or have an interest in another property. This applies unless the property is unsuitable for your household’s needs.
You have the right to live in the State.
How do I apply?
Each local authority introduces its own affordable housing scheme and manages the application process. When homes are available under the scheme they will be advertised on the local authority's website and in a local newspaper. The advertisement will include details about the scheme including how and when to apply. You will need to complete the application form and return it to the local authority, along with any additional documentation, by the closing date for the scheme. If you are interested in the Local Authority Affordable Purchase Scheme, you should check your local authority's website for details about upcoming schemes in your area.
What happens to my application next?
The local authority assesses your application and decides if you qualify for the scheme. They may ask for additional information to help with this decision.
If there are more eligible applicants than affordable homes available, the local authority will prioritise the applicants based on a number of criteria. Firstly, they will look at the suitability of the home to the household. For example, if the home has 4 bedrooms, priority will be given to applicants from households with 3 members of more.
If there are homes still available after this has been applied, priority for the remaining homes may be based on the order in which the applications were received, or criteria decided by the local authority.
The local authority will contact you to let you know if you qualify for the scheme. If you qualify for the scheme, the local authority will also let you know if you are being offered a home or not. If you do not qualify, the local authority should give you the reasons for this decision.
First Home Scheme
The First Home Scheme is the national scheme which will support first-time buyers on moderate incomes to buy new homes at reduced prices. This shared equity scheme will be available nationwide and is due to open for applications in July 2022. With this shared equity scheme the State and participating banks will pay up to 30% of the cost of the new home in return for a stake in the home. If you want, you can buy back the stake at any time, but you don’t have to.
Additional information about this planned scheme is detailed in the Housing for All plan, which sets out the housing plan for Ireland to 2030.
Legislative changes for developers
Legislative changes have been made to ensure housing developers set aside homes for affordable housing.
Developers purchasing land for residential development must set aside 20% of new developments for social or affordable housing. At least 10% must be for social housing and the remainder can be for affordable housing, which can include affordable homes for purchase, cost rental, or a mixture of both. This requirement applies to new developments of 5 or more houses where the:
- Land was purchased after 1 August 2021
- Land was purchased before 1 September 2015 and gets planning permission after 2 September 2021
- Planning permission is granted after 31 July 2026, regardless of when the land was purchased
Note: Between 2015 and 2021 the total requirement was 10%. This still applies to land purchased between 1 September 2015 and 31 July 2021, which has new planning permission granted between 3 September 2021 and 31 July 2026.
These changes came in on 3 September 2021 under the Affordable Housing Act 2021, which amended Part V of the Planning and Development Acts 2000 to 2020. The Housing Agency has more information about these changes.
Previous affordable housing schemes
In 2011, the old affordable housing schemes were discontinued. However, there are still people living in houses they bought under these schemes. This section describes what happens if you want to sell a home you bought under one of these schemes.
If you bought an affordable home
If you sell your house within 20 years, you will have to pay the local authority a percentage of the proceeds of the sale - known as clawback. This percentage is 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 any clawback to the local authority.
The market value at the time of selling your affordable home is used to calculate the amount of clawback 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 are below the initial price actually paid, you will not have to pay the local authority a percentage of the proceeds of the sale.
Find out more about living in an affordable home under the previous affordable housing schemes.