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Saturday 23 August 2014

Council tenants offered homes at 60pc discount

Paul Melia

Published 09/11/2012 | 05:00

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COUNCIL tenants will be allowed buy their homes from next year at a discount of up to 60pc off the market price.

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New rules being introduced by Housing Minister Jan O'Sullivan will offer 125,000 tenants across the country the opportunity to purchase their home, even after occupying them for a short number of years.

It means that someone buying a home worth €200,000 could secure it for just €80,000.

The move comes as part of efforts to help people on low incomes to buy their own homes, and help boost the flagging property market.

Some 10,000 tenants have purchased their homes over the last decade under a number of different purchase schemes.

However, demand has fallen off since 2007, with just 195 purchases completed in 2010.

The older schemes discounted 3pc off the market price per year of occupancy, up to a maximum of 10 years or 30pc, but the new rules will be more flexible.

The Department of the Environment said discounts would range from 40pc to 60pc -- meaning a house valued at €200,000 could cost just €80,000.

The discount will be primarily based on the family income.

"Changes will be made in how tenant purchase operates," Housing Minister Jan O'Sullivan told the Irish Independent.

"Whereas the current discount available to tenant purchasers relates to length of tenure, discounts under the new scheme will relate to family income.

Fairer

"It's a fairer model, and the conditions of sale will incentivise people to stay in their community for a reasonable period after purchase."

Under the new scheme, tenants will raise the mortgage from the main banks, with local authorities also allowed to provide funding in limited cases, for example, when the banks have refused an application.

The money raised will be used by city and county councils to rent properties on long-term leases for other tenants.

This follows a decision by government to move away from building and purchasing homes for council tenants.

The new scheme comes because applications to purchase homes have dwindled in recent years. In 1996, some 2,284 homes were purchased. It fell to just 195 in 2010, with 299 sold last year.

The increase in 2011 was due to a one-off incentive offered to purchasers with more than 10 years occupancy, where a discount of 45pc would be applied.

Applications under the existing schemes will end on December 31, and councils will have a year to finalise sales.

The new system is expected to begin next year.

Irish Independent

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