The Affordable Housing Scheme aims to help lower income households to buy their own home in areas where house prices have created an affordability gap for the lower income house purchasers. The newly constructed homes are offered for sale to eligible first-time purchasers at prices significantly less than their actual Market Value.
The local authority will generally advertise the availability of houses for sale under this scheme in the local press. If there are more eligible applicants than houses, the local authority will determine the order of priority, taking account of household circumstances, etc.
The houses will be purchased outright by way of a mortgage, usually provided by the local authority, of up to 97% of the sale price, subject to repayments being no more than 35% of the household net income (in order for you to be able to afford the repayments). Loans are advanced over a 25-year term.
Do I qualify?
You qualify for the Affordable Housing Scheme if:
a) You are in need of housing and your income satisfies the income test.
b) You have been approved for local authority housing.
c) You are a local authority tenant or tenant purchaser who wishes to buy a private house and return your present house to the local authority.
d) 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 local authority.
Note: The income test applies to point a) above only. You are exempt from an income test under points b), c) and d). However you must be earning sufficient income to be able to meet the repayments. You must be in full-time permanent employment for a period of not less than 9 months.
The income test
Single income household:
If your gross income (before tax) in the last income tax year was €40,000 or less, you qualify.
Double income household:
Multiply the gross income (before tax) of the principal (greater) earner in the last income tax year by 2.5 and add the gross income of the subsidiary (lesser) earner in the last tax year. If the result is €100,000 or less, you qualify.
Example of income test:
| Single Income Household | Single Income Household | Double Income Household | Double Income Household | |
| Principal Income Household | €35,000 | €41,000 | €28,000 | €40,000 |
| Subsidiary Income | — |
— |
€20,000 | €15,000 |
| Formula | Less than €40,000 | Less than €40,000 | €28,000 x 2.5 + €20,000 = €90,000 |
€40,000 x 2.5 + €15,000 = €115,000 |
| Eligible | Yes | No | Yes | No |
Mortgage Subsidy
A subsidy is available to reduce the mortgage repayments for lower income households. If your household income (gross) is less than €28,000 in the preceding tax year you will be entitled to mortgage subsidy. The amount of mortgage subsidy you are entitled to is broken down into the following income brackets:
| Household Income per annum | Subsidy Payable per annum | |||
| €13,000 and under | €2,550 | |||
| €13,001 - €15,500 | €2,300 | |||
| €15,501 - €18,000 | €2,050 | |||
| €18,001 - €20,500 | €1,800 | |||
| €20,501 - €23,000 | €1,550 | |||
| €23,001 - €25,500 | €1,300 | |||
| €25,501 - €28,000 | €1,050 | |||
| Over €28,000 | Nil |
Selling an Affordable House
If you sell your house purchased under the Affordable Housing Scheme 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. If you sell your house after owning it for 20 years you will not have to pay the local authority anything.