EXPLAINER: Making home ownership possible: A guide to the available supports

Owning your own home can feel out of reach for many people, especially with rising prices and increasing competition. But there are supports designed to help bridge the gap.

Local Authority Affordable Purchase Scheme

For many buyers, the biggest barrier to owning a home is the price. This scheme tackles that by lowering the cost of newly built homes for people on moderate incomes, particularly in high-demand areas.

The price reduction is covered by the local authority taking a share in the property. For example, if the home is discounted by 30%, the local authority will own a 30% interest in it.

This scheme is aimed at first-time buyers, but there are some exceptions.

What are the main conditions?

To qualify for the Local Authority Affordable Purchase Scheme, a number of criteria must be met:

• Equity stake: The local authority’s share in your home must be repaid if you sell the property or after 40 years. You can also choose to repurchase it earlier, either in full or in part, with a minimum repayment of €10,000. The equity stake is calculated as a percentage of your home’s market value, so if property prices rise, the amount you need to repay will also increase.
• Clawback: If you decide to sell your home within 20 years, a portion of the sale proceeds, called clawback, is paid to the local authority. This is based on the difference between the original purchase price and the market value at the time of sale. After 10 years, the clawback reduces by 10% each year, and after 20 years, no further payments are due. If the home sells for less than you paid, no clawback applies.
• Income: Your household income must fall below a set threshold. This is assessed by calculating your “purchasing power,” which is generally your gross annual income multiplied by 4. To qualify, this figure must be less than 85.5% of the home’s market value. For example, if the home’s market value is €300,000, 85.5% of that is €256,500. If your gross annual income is €60,000, your “purchasing power” is €60,000 × 4 = €240,000. Since €240,000 is less than €256,500, you would meet the income requirement.
• Alternatively, you may be eligible if you can show that a lender will not offer you a mortgage for 85.5% of the home’s market value, for example, due to age or other lending criteria. The Affordable Purchase Housing Income Assessment Policy explains how local authorities calculate your household income for this scheme. It sets out which sources of income are included and which are excluded; for example, certain social welfare payments are not counted.
• Deposit and Savings: You must have a minimum deposit of 10% of the purchase price. While some savings are allowed, only the amount needed for the deposit plus up to €30,000 is disregarded. Any savings above this are added to your purchasing power, and if this brings you above 95% of the market value of the home, you will not be eligible.
• First-Time Buyer or Fresh Start Applicant: You are considered a first-time buyer if you have never owned or built a home and do not have an interest in any property in Ireland or abroad, with limited exceptions where a property is no longer suitable for your needs.
• A “fresh start” applicant is someone who previously owned a home but no longer has a financial interest in it due to circumstances such as separation, divorce, insolvency, or bankruptcy.
• Use of Property: The home must be bought as your principal private residence and lived in as your normal place of residence.
• Residency Requirements: Applicants must be over 18 and have the right to live in Ireland on a permanent basis.

How much will it cost me?

The local authority sets the price of your new home and the share they take in it, based on what you can afford to borrow and the minimum price for the home, in line with regulations. Their equity stake ranges from 5% to 40%, making it easier to step onto the property ladder.

Importantly, the Help to Buy Scheme may also be available alongside this scheme, giving you extra support when buying your home.

How to I apply?

Each local authority runs its own affordable housing scheme and manages applications independently. When homes under the scheme become available, they are advertised on the local authority’s website and in local newspapers, with clear instructions on how and when to apply. You can also check the Affordable Homes website for a complete list of available properties.

Home ownership doesn’t have to feel out of reach. The Local Authority Affordable Purchase Scheme helps make it possible. Plan carefully, check your eligibility, and take the first step toward owning your home – it may be closer than you think!

For further advice or if you wish to discuss any other legal area please contact reception@lynchsolicitors.ie or telephone 052-
6124344.

The material contained in this blog is provided for general information purposes only and does not amount to legal or other professional advice. While every care has been taken in the preparation of the information, we advise you to seek specific advice from us about any legal decision or course of action.

*Sponsored Content