Money Matters

AFFORDABLE HOUSING SCHEME

( part 2 of 2 )Selling your house

If you sell your house within 20 years, you will have to pay the local authority a percentage of the proceeds of the sale. This percentage is expressed as the percentage difference between the sale price and the market value of the house. This amount will be reduced by 10% each year after you have owned your home for 10 years. So, if you sell your home after 20 years, you will not have to pay anything to your local authority.

Additional sources of affordable housing

In addition to the Affordable Housing Scheme, affordable housing is provided under Part V of the Planning and Development Acts 2000-2002. Part V allows a local authority to require developers to set aside up to 20% of new developments of 5 or more houses for social or affordable housing. Each local authority has to include these provisions (i.e. the commitment to providing a percentage of social and affordable housing) in its housing strategy, which form part of the development plan for its area.

While up to 20% of any new housing development can be set aside for social/affordable housing, the local authority will determine the exact percentage, given the level of social need in the area. It may decide for example, that zero percent of the overall development is appropriate.

This provision of a percentage of affordable or social houses applies to any development of 5 or more homes, so now, any time that 5 or more homes are being developed, the local authority will decide how much (if any) will be affordable, social voluntary, housing etc. This is determined in consultation with the developer, taking into account the appropriate percentage in the development plan.

There are no rules about where affordable houses should be located in new developments. It is for this local authority to decide which homes should be designated as affordable housing, as appropriate. For example, the affordable houses may be spread through the development/estate or may be grouped in pairs, in areas, etc. The proximity of these homes will all depend on what the local authority as most appropriate for the area and most appropriate for the residents of these homes.

You are eligible to buy an affordable house provided under Part V of the Planning and Development Acts 2000-2002 if 35% of your income is not sufficient to enable you to buy a house. If you get your loan from the local authority and your gross household income was below €28,000 in the previous tax year, you will be entitled to a subsidy that will reduce your mortgage payments. This subsidy will be paid to the local authority. The subsidy is between €1,050 and €2,550 per year. A claw back similar to that which applies under the Affordable Housing Scheme is payable if the house is sold within 20 years of purchase.

How to apply

You may be required to supply the following information with your application.

-A current payslip from your employer.

-An Income tax form (P.60) or a PAYE balancing Sheet (P21)

-Other documentation that may be requested by the local authority.

You may also be requested to submit a letter from your employer confirming that you are a permanent employee. For self-employed people, you may be required to submit Audited Accounts for the previous three years

If you are currently living in rented accommodation, you may have to produce a statement of your weekly rent signed by the landlord or you can submit a copy of your rent book with your application.