What is the Incremental Purchase Scheme?
It is a scheme that will be available from 1st January 2016 that will allow social housing tenants to purchase the dwelling in which they reside from the Council. This scheme will replace previous Tenant Purchase Schemes.
Who is eligible?
- The person must be the tenant of the house to be sold by the housing authority and the house must be available for sale under the scheme.
- The tenant or one of the tenants in the case of joint tenants, must have been in receipt of social housing support for a minimum period of one year.
- The tenant must have a minimum reckonable income of €15,000 per annum
- A tenant may be disqualified from purchasing a house for a number of different reasons including rent arrears and anti-social behaviour (See full scheme for details)
- Certain properties may not be purchased under this scheme including but not exclusively the following:
- Houses designed for occupation by elderly persons,
- Group traveller housing,
- Part V dwellings provided in private estates,
- Other properties the Council do not wish to include in the scheme
What is the purchase price of the house?
The purchase price of a house is the market value of the house for the purposes of calculating the applicable discount and will be determined by Laois County Council.
What is the price discount?
The housing authority will give the tenant a discount of 60%, 50% or 40% off the purchase price of the house, depending on reckonable tenant income:
- A discount of 60% off the purchase price applies where reckonable tenant income is between €15,000 and €20,000;
- A discount of 50% off the purchase price applies where reckonable tenant income is between €20,001 and €29,999;
- A discount of 40% off the purchase price applies where reckonable income is equal to or greater than €30,000.
How do I pay for the house?
- The tenant is not required to pay a deposit to the housing authority as part of the tenant purchase process;
- The tenant must pay the discounted purchase price of the house to the housing authority from one, or a combination, of the tenants own resources and/or a local authority house purchase loan.
- The possibility of private financial institutions providing loan finance to tenant purchasers under the new scheme is currently being examined.
Is there a charge placed on the property?
On the sale of a house under the scheme, the council will place an incremental purchase charge on the house equivalent to the discount granted to the tenant off the purchase price. Thus, if the council gives a 50% discount to the purchaser, the incremental purchase charge will be 50% of the value of the house. The period for which the charge applies to the house (i.e. the charged period) depends on the level of the charge. The incremental purchase charge will wither away to nothing over the charged period in annual incremental releases of 2% of the value of the house, provided that the purchaser complies with the terms and conditions of the transfer order. The incremental releases for the first 5 years of occupancy will not be applied until that period has expired;
Can I sell my house during the charge period?
- The Housing Authority will have first refusal on buy-back of tenant purchased houses resold during the charging period, in which case the resale price is the current market value of the house less the value of the outstanding charge on the property.
- If the house is resold within 5 years of purchase the tenant purchaser must pay the current value of the total charge back to the Council. If later it will be the current value of the outstanding charge.
This is a summary of the scheme for information purposes only and does not include all the terms and conditions. A brochure will be available by download from 1st January with the full conditions of the scheme.