Dáil Éireann Debate, Tuesday - 13 October 2020
148. Deputy Róisín Shortall asked the Minister for Housing, Local Government and Heritage the price range of homes to be available under the affordable housing scheme for first-time buyers; if a 10% deposit will be required by applicants; if a grant or targeted financial supports will be available for applicants as part of the scheme; and if he will make a statement on the matter. [29722/20]
Amharc ar fhreagraThe statutory basis for the delivery of affordable housing for purchase in the State is Part 5 of the Housing (Miscellaneous Provisions) Act 2009, which was commenced in June 2018.
Where an affordability challenge has been identified by a local authority together with a viability to deliver more affordable homes, the Serviced Sites Fund is available to sub-vent the cost of facilitating infrastructure to a maximum amount of €50,000 per home. By leveraging the value of this funding and that of their land, local authorities can then develop homes and make them available to purchase or rent at below open market values.
To date, a total funding of €127 million from overall SSF of €310 million has been approved in principle to provide infrastructural work that will support 35 projects in 14 local authorities, and facilitate the delivery of in the region of 3,200 more affordable homes
The ultimate selling prices of affordable homes will obviously be influenced by a number of factors which will vary significantly from development to development. This includes the overall development cost of each particular project, the housing type/tenure mix involved, and the local housing market.
Given that in the majority of cases the detailed design, planning and construction procurement processes have yet to be completed and as the open market value of homes cannot be ascertained until the homes are made available at the time of sale, it is not possible to confirm the ultimate final cost reduced purchase price in advance. However, I can confirm that applications for SSF funding were made by local authorities on the basis of being able to deliver homes for sale at discounts of between 10% and a maximum of 40% below open market prices.
Under the Housing (Miscellaneous Provisions) Act, 2009 a charge will be placed on the property equal to the percentage discount from open market value, giving the housing authority an equity stake in the property.
A 10% deposit will be required from the purchaser whether he or she obtains a mortgage from a bank/financial institution or a Rebuilding Ireland Home Loan. To this end, the prospective purchaser may be eligible for Help to Buy (HTB) which helps with the deposit required to buy or build a new house or apartment as their home. It gives a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid by the applicant in Ireland over the previous four years. The amount that can be claimed is the lesser of:
- €20,000 (increased to €30,000 for enhanced relief);
- 5% of the purchase price of a new home. For self-builds this is 5% of the completion value of the property. (This is increased to 10% for enhanced relief);
- the amount of Income Tax and Deposit Interest Retention Tax (DIRT) paid for the four years before purchase or self-build.
A temporary enhancement to the existing HTB scheme for the remainder of 2020 was announced in the July Stimulus plan. The enhanced HTB relief provides that where applicants satisfy certain conditions, increased relief is available up to a maximum of €30,000.
