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Can I Buy my Local Authority Home?

There are a number of ways you may be able to buy your local authority home.

1. Tenant Purchase Scheme (Houses)

If you are a tenant of a local authority house for at least one year you may be able to apply to your local authority to buy the property outright.

The price of the house will be its market value, as determined by the local authority, in its existing state of repair and condition, less discounts. The discount is 3% of the value of the house for each year of tenancy of a local authority house (up to a maximum of 10 years).

The structural condition of the house is taken into account and any increase in the market value due to improvements made to the house by the tenant will be disregarded in calculating the price.

Since 1 April 2011, stamp duty is payable on all tenant purchase houses. The maximum payable is €100.  If you want to sell the house within 20 years of the date you bought it, you must get the consent of the local authority.

In general, most houses are available for sale under the Tenant Purchase Scheme with the exception of senior citizens ‘properties, maisonettes, duplexes and all flats/apartments. Local authorities may, at their discretion, exclude houses for reasons of good estate management, because of their structural condition or if they propose to carry out remedial works to them.

A new Fixed Term Tenant Purchase Scheme was announced in 2011. It ran alongside the existing scheme but was focused on long standing tenants for over ten years. Qualifying tenants could receive a 3% discount for every year (up to year 15) that they were a tenant of the local authority – the maximum discount available was 45%. This was a limited scheme available to long-term tenants and was only open for applications in 2011.

For more information contact your local authority directly

2. Tenant Purchase of Apartments Scheme

The Tenant Purchase of Apartments Scheme allows you to purchase your apartment, if your apartment complex has been set aside for sale to tenants.

There are a number of criteria which must be met before a local authority can set aside an apartment complex for sale. One of these criteria is having a tenant vote on whether tenants want the complex to become available for sale. If enough tenants are interested in buying their apartment, then the local authority may formally designate the apartment complex as part of the scheme, depending on other criteria being met.

If an apartment complex is designated for the Tenant Purchase of Apartments Scheme, a management company will be established to manage the apartment complex. If you purchase your apartment, you will automatically become a member of the owners’ management company (OMC) which manages the apartment complex.

As apartment complexes have common areas used by all residents, such as the green areas, the stairs and hallways and the lifts, the OMC exists so that they can manage all those common areas on behalf of all the residents in the apartment complex. The OMC will also arrange insurance for the overall building(s).

The OMC will have an annual charge (made up of the ‘service charge’ and the ‘sinking fund contribution’), which apartment owners pay every year. The service charge goes towards the day-to-day running of the apartment complex and the sinking fund contribution is set aside for any major repairs or refurbishment to the apartment complex which may be needed in the longer term.

In terms of the cost of the property, the local authority will set the purchase price of the property and depending on the income in your household, you will receive a discount on the purchase price. This could be a discount of 40%, 50% or 60%. You will also need to pay a deposit of 5%.

Depending on the discount received, there will be a local authority charge of 20, 25 or 30 years on each apartment. Generally, if you remain living in the apartment, the local authority charge will reduce by 2% of the apartment’s value, every year. So, if you sell the property before the charge period is over, there would still be a certain percentage (%) of charge left. As a result, you would have to pay the housing authority the remaining percentage (%) out of the money that you receive from the sale.

As this is a new scheme, it is likely that a limited number of apartment complexes will be set aside for sale in the first few years.

For more information contact your local authority directly

Link to Finance and Home Ownership

Link to more information on Citizens Information Website