Dáil Éireann Debate, Wednesday - 5 October 2016
41. Deputy Thomas Pringle asked the Minister for Housing, Planning, Community and Local Government the consultation which took place with the banks when drafting the incremental purchase scheme for tenant purchases of local authority housing to ensure banks would grant mortgages where a local authority charge is based on an authority; and if he will make a statement on the matter. [28645/16]
Amharc ar fhreagraThe new 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 and applies to all existing local authority houses, other than those classes of houses excluded under legislation. To be eligible, tenants must meet certain criteria, including having been in receipt of social housing support for a minimum period of one year and having a minimum reckonable income of €15,000 per annum.
The terms of the Scheme involve discounts of 40%, 50% or 60% off the purchase price of the house, linked to tenant income. On the sale of a house under the Scheme, the housing 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.
The incremental purchase charge is the first charge placed on the house, and would normally have priority over any subsequent charge on the property, including any private mortgage charge. However, the Housing (Miscellaneous Provisions) Act 2014 provides that a housing authority may enter into an agreement with a licensed financial institution, giving the incremental purchase charge a lower priority relative to the private mortgage charge.
The Department met with the Banking & Payments Federation Ireland during the course of the development of the new scheme and will continue to liaise with them as issues arise.
