Affordable housing schemes
Affordable housing schemes aim to 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 2011, the existing affordable housing schemes were discontinued. There are new affordable purchase schemes planned, but they are not yet in operation. This document includes some general information about the planned new schemes and describes how the previous schemes worked.
Planned new affordable housing schemes
A new Affordable Housing Act 2021 was passed in July 2021, but regulations are needed to set-out the details of the schemes. These regulations are not available yet. However, it is planned that there will be 2 new affordable purchase schemes:
Local authority affordable purchase scheme
A local authority affordable purchase scheme will be available to help people on low to moderate incomes to buy homes at reduced prices. These new homes will be located in areas with the greatest housing need and where affordability is an issue. The local authority will have 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 will be aimed at first-time buyers, but other groups may also be able to apply, for example, people who have experienced relationship breakdowns or personal insolvency.
Each local authority will introduce its own scheme and the first homes will be available in late 2021. The application process will be managed by the local authority delivering the homes. When homes are available under the scheme they will be advertised so people can apply. For more information see the Department of Housing, Local Government and Heritage’s leaflet about the local authority affordable purchase scheme.
First Home scheme
The First Home scheme will support first-time buyers on moderate incomes to buy new homes at reduced prices. This shared equity scheme will be available nationwide and will be called the First Home Scheme. 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.
This additional information about the planned schemes 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 now 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 the old schemes including 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 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 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 be liable to pay the local authority a percentage of the proceeds of the sale.
Find out more about living in an affordable home.
How the schemes worked
Affordable Housing Scheme
Under the Affordable Housing Scheme the local authority provided land on which new houses were built and sold. You would qualify for the Affordable Housing Scheme if :
- You were in need of housing and your income satisfied the income test, or
- You were registered on a housing waiting list with a local authority, or
- You were a local authority tenant or a tenant purchaser and you wanted to buy a private house and return your present house to the local authority, or
- You were a tenant for more than one year of a home provided by a housing association under the Capital Loan and Subsidy Scheme (pdf) and you wanted to buy a private house and return your present house to the housing association.
The income test only applied to people mentioned in the first bullet point; if you were covered by the second, third or fourth bullet points, you were exempt from the income test. However, all applicants had to have enough income to meet their mortgage repayments after paying other bills.
Some local authorities had lower or higher income limits than others. As a guide, the following are approximate limits:
- Single-income household: If your gross income (before tax) in the last income tax year was between €25,000 and €58,000, you might be eligible.
- Two-income household: If your joint income was €75,000 or less, you might be eligible.
Part V affordable housing
Part V of the Planning and Development Act 2000 allows a local authority to require developers to set aside a percentage of new developments for social or affordable housing. Between 2000 and 2015 this was up to 20% of new developments of 5 or more houses. The local authority decided how much (if any) of the 20% would be social, voluntary or affordable housing.
There were no rules about where affordable houses should be located in new developments. It was for the local authority to decide which homes should be designated as affordable housing, as appropriate.
You were eligible to buy an affordable house provided under Part V of the Planning and Development Act 2000, if 35% of your income was 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 provided land on which new houses were built and sold.The AHI aimed to meet the needs of people who would formerly have been able to buy a house, but found themselves priced out of the market.
You were eligible to buy an affordable house provided under the Affordable Housing Initiative if 35% of your income was not sufficient to enable you to buy a house.
Mortgages for affordable homes
Mortgages were available from local authorities and some banks also provided mortgages for affordable homes. The loan could be up to 97% of the price of the house, subject to repayments being no more than 35% of the household's net income after tax and social insurance (PRSI). Some private lenders had affordable housing mortgages. Applicants for private sector affordable mortgages had to be pre-approved by their local authorities for a suitable property.
Mortgage Subsidy Scheme
If you got a mortgage for your affordable home from the local authority and your gross household income was less than €28,000, you would be entitled to a subsidy of between €1,050 and €2,550 per year, paid directly to the local authority.
A household that did not qualify for this subsidy could instead qualify for the Mortgage Allowance Scheme.
For more information about affordable housing, contact your local authority.