Local authority tenants to have greater chance of purchasing homes under rule changes

It is set to be easier for people living in local authority houses to buy their homes under changes to the Incremental Tenant Purchase Scheme that kick in this month. A reduced minimum income requirement for the scheme and a broadening of the welfare payments that can be counted as income are particularly geared towards helping older people to buy.

Minister for Housing Darragh O’Brien said the changes to the scheme “will expand opportunities to own for older people who have a nest egg or savings to invest”. He added: “We have opened up the opportunity to buy to more council house tenants over the past three years including pensioners and this is part of that.”

He said the changes would “ensure that we strike a balance between facilitating long-term tenants to purchase their homes and ensuring the continued sustainability of the scheme by not unduly diminishing the local authority housing stock available for those on the waiting list”.

The Incremental Tenant Purchase Scheme allows local authority tenants to by their homes with discounts on the market rate paid of between 40 per cent and 60 per cent depending on income. Some 350 local authority homes were bought in this way in 2022.

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An incremental purchase charge equal to the discount is placed on the house and this remains in place for up to 30 years, reducing annually by 2 per cent until it reaches zero provided the new owner obeys the terms and conditions of the scheme.

The purchaser must live in the house and get agreement from the local authority if they want to sell, let or sub-let the property. If they sell while the incremental purchase charge is still in place the owner has to pay back the value of the outstanding charge on the house to the local authority.

The changes to the scheme come into operation on January 29th. The minimum income requirement for the scheme is being reduced from €12,500 to €11,000.

Under the existing rules couples making a joint application to buy both had to be in receipt of social housing supports for 10 years before they were eligible to purchase. The change from next month means that just one of the tenants needs to have got social housing supports for 10 years.

Currently income from employment and private and State pensions are used to determine a tenant’s minimum income. The changes to the scheme mean that income from certain social welfare payments can also be included in the calculation.

The newly eligible payments for inclusion in determining income are the widow/widower/surviving civil partner’s (contributory and non-contributory) pension; the blind pension; the invalidity pension, and the disability allowance.

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