Dáil Éireann Debate, Tuesday - 3 July 2018
542. Deputy Sean Sherlock asked the Minister for Housing, Planning and Local Government the reason long-term tenants with a proven rental record who do not need a council loan to purchase a home and are in a position to partly finance the purchase are being discriminated against in view of the fact they do not fit the eligibility criteria under the tenant purchases incremental scheme. [28694/18]
View answer543. Deputy Sean Sherlock asked the Minister for Housing, Planning and Local Government if the tenant purchase incremental scheme will be reviewed to permit fairness and equal opportunity to all council tenants. [28695/18]
View answerI propose to take Questions Nos. 542 and 543 together.
The Tenant (Incremental) Purchase Scheme came into operation on 1 January 2016. The Scheme is open to eligible tenants, including joint tenants, of local authority houses that are available for sale under the Scheme. To be eligible, tenants must meet certain criteria, including having a minimum reckonable income of €15,000 per annum and having been in receipt of social housing support for at least one year.
The minimum reckonable income for eligibility under the scheme is determined by the relevant local authority in accordance with the detailed provisions of the Ministerial Direction issued under Sections 24(3) and (4) of the 2014 Act. In the determination of the minimum reckonable income, local authorities include income from a number of different sources and classes, such as from employment, private pensions, maintenance payments and certain social welfare payments, including pensions, where the social welfare payment is secondary to employment income.
In determining reckonable income, the income of all tenants of the house, including adult children that are joint tenants, is included, as is the income of the spouse, civil partner or other partner/co-habitant of a tenant who lives in the house with them, thus ensuring the appropriate level of discount is applied to the purchase price.
The terms of the Scheme involve discounts of 40%, 50% or 60% off the purchase price of the house, linked to the tenant’s reckonable annual income. On the sale of a house under the Scheme, the local authority will place an incremental purchase charge on the house equivalent to the discount granted to the tenant. Generally, the charge withers away over a period of 20, 25 or 30 years depending on the level of discount involved, as set out in the following table.
|
Reckonable Annual Income |
Discount |
Charge period |
|
Between €15,000 and €20,000 |
60% |
30 years |
|
Between €20,001 and €29,999 |
50% |
25 years |
|
€30,000 or more |
40% |
20 years |
The minimum income criterion was introduced in order to ensure the sustainability of the scheme. Applicants must demonstrate that they have an income that is long-term and sustainable in nature. This ensures that the tenant purchasing the house is in a financial position, as the owner, to maintain and insure the property for the duration of the charged period, in compliance with the conditions of the order transferring the ownership of, and responsibility for, the house from the local authority to the tenant.
The financing of any house sold under the Tenant (Incremental) Purchase Scheme is a separate matter from the eligibility criteria for the scheme. If the tenant is deemed eligible under the scheme, he or she may fund the purchase of a house from one, or a combination, of his/her own resources or a mortgage provided by a financial institution or a local authority house purchase loan.
In line with the commitment given in Rebuilding Ireland, a review of the first 12 months of the Scheme’s operation has been undertaken. The review has incorporated analysis of comprehensive data received from local authorities regarding the operation of the scheme during 2016 and a wide-ranging public consultation process which took place in 2017 and saw submissions received from individuals, elected representatives and organisations.
The review is now complete and a full report has been prepared setting out findings and recommendations. In finalising the report some further consultation was necessary and due consideration had to be given to possible implementation arrangements. These matters are now almost completed and I expect to be in a position to publish the outcome of the review shortly.
