'Tenants shouldn't get discount if they want to buy council house'
Published 20/06/2014 | 02:30
THE Government has been accused of selling off state assets on the cheap under a new plan to allow local authority tenants to buy their homes at huge discounts.
People who are in council estates will be able to buy the properties for a discount of up to 60pc to the market rate.
Housing charity Cluid said the scheme was unfair to taxpayers as it amounted to selling off state assets on the cheap.
It said local authority tenants were already benefiting from subsidised rents.
Head of policy at Cluid, Simon Brooke, said there was no reason why local authority tenants who want to buy their properties should not pay the full market price.
Cluid is a not-for-profit housing association. It and Respond are the two largest housing associations in the country.
And Mr Brooke said the new tenant purchase scheme would exclude those who rely on social welfare for income, which he said was unfair.
The new tenant purchase scheme is part of the Housing Bill, which is going through the Oireachtas at the moment.
Under the scheme, the price paid by a family for the property they are living in will be linked to their income.
In the scheme that ended in 2012, the purchase price was based on the length of time the family lived in the house.
The maximum discount under the old scheme for houses was 30pc of the market value of the property, Mr Brooke said.
Now tenants with an income of €15,000 will be able to get a 60pc discount on the market value of the house if they buy it.
This will mean such a family could buy a €200,000 local authority house for just €80,000.
The discount falls back when income goes over €15,000.
Mr Brooke said: "Cluid is not opposed to a tenant purchase scheme in principal. But we believe people should have to pay the full market value.
"It is wrong of the Government to be selling off taxpayer-funded assets at what amounts to a knock-down price."
He added that local authority tenants were already "getting a good deal on rents". This is because the rent council tenants pay is based on their income, the so-called rent differential.
And he said the new scheme would exclude those whose only income is from social welfare.
A spokesman for the Department of the Environment denied state assets were being sold cheaply.
Previous tenant purchase schemes had similarly large discounts built into them.
And he added that under the new scheme the local authority will place a charge on the house, equal to the discount. This withers away over time provided the purchaser complies with the sale conditions.
The new scheme provides that the house cannot be let or sold without the prior consent of the local authority, he said.
Housing Minister Jan O'Sullivan said recently the new scheme was better than the old one.
"Whereas the current discount available to tenant purchasers relates to length of tenure, discounts under the new scheme will relate to family income. It's a fairer model."
The new legislation also gets rid of the rent allowance scheme to move to a new Housing Assistance Payment.
This will still be available to those who take up a job, getting rid of a disincentive to come off welfare.
Irish IndependentFollow @Indobusiness