Dáil debates

Tuesday, 27 November 2012

Topical Issue Debate

Tenant Purchase Scheme

5:50 pm

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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I thank the Ceann Comhairle for allowing this topic to be raised. I thank the Minister of State for coming to the House to deal with it. She will be aware that I raised this issue at an Oireachtas joint committee meeting some weeks ago. I mentioned that people in local authority houses have just a few weeks left to submit applications under the tenant purchase scheme. The Minister of State should give those people more time to buy out their houses. The 1995 tenant purchase scheme has enabled 10,000 families to purchase their own houses over the past ten years.

I understand the number has fallen but people are still very interested in this scheme.

It is important to point out there was up to a 30% discount under the 1995 scheme and up to a 45% discount under the 2011 scheme, which had certain attractions. A new scheme will be introduced in the new year but it will contain changes in that it will not refer to the length of tenure in houses, as in the current system, but rather the discounts will relate to family income. That is a little vague and perhaps the Minister of State will provide more information.

The Minister of State will need to bring in new legislation next year if these changes are to come about. There is talk of an incremental purchase scheme which will incentivise families to remain in the community following the purchase, and I make the point that this is equally true of the present scheme. The Minister of State is to extend the terms of the new scheme to all housing authority stock. Will she consider extending the terms to, for example, the voluntary housing sector, given many in that sector have applied to purchase houses although that is not available at present? Perhaps a new scheme will be considered in this area. I hope the Minister of State will address these issues, namely, the extension of the present scheme and when the legislation will be introduced.

It now appears tenants should apply both under the current scheme and also when the incremental purchase scheme is announced and published in legislation. What is very clear is that information should be made available to those who want to avail of this opportunity. If the date is not being extended, people will want to know they now have only one month to apply under the old scheme.

6:00 pm

Photo of Jan O'SullivanJan O'Sullivan (Limerick City, Labour)
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I thank Deputy Kitt for raising this important issue, in which he has previously expressed an interest in the committee. I want to set out the Government's position. The 1995 tenant purchase scheme, as it is commonly known, has been a major success, enabling more than 32,000 local authority tenants to purchase their homes. However, take-up on the scheme has dwindled in recent years and there were only 195 purchases across all housing authorities in 2010. The time is right to look at other tenant purchase options.

In this context, in June 2010 my Department requested housing authorities to notify all eligible tenants of the decision to wind down the 1995 scheme over two years and replace it with a new tenant purchase scheme along incremental purchase lines. I decided in June of this year to extend the closing date for applying to purchase under the scheme and I have recently signed regulations prescribing 31 December 2012 as the last day for applying to purchase and 31 December 2013 as the last day for selling houses under the scheme. That gives one year in which the applications can be processed. By the closing date, tenants will have had two and a half years to decide whether they wish to apply to purchase under the existing scheme or to await the new replacement scheme.

The Government is committed to retaining an option for local authority tenants, who are in a position to do so, to purchase their homes. My Department is currently developing the heads of a housing Bill which will provide, among other things, for a new purchase scheme for tenants of existing local authority houses. I intend to seek Government approval for the drafting of the Bill as soon as possible so enactment can proceed without delay.

The new scheme will be based on the incremental purchase model, involving sales price discounts for tenants related to household income, and a corresponding local authority charge on the property that will dwindle away over a period unless the house is resold or the tenant purchaser fails to comply with certain conditions of the sale. These provisions are in line with the terms of two tenant purchase schemes introduced in recent years, one for designated new local authority houses and one for local authority tenants of apartments. I look forward to introducing the new scheme as quickly as possible after the existing scheme ends in December 2013.

We have signalled for quite some time that the scheme is coming to an end. People have until the end of the year to apply but there is then a full year for processing, which gives a significant amount of time. In addition, as Deputy Kitt suggested, we will be bringing forward legislation next year in regard to a new scheme.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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I welcome the fact legislation is to be introduced. I make the point that this information should be given as much publicity as possible and I would like to hear further details from the Minister of State on the new scheme.

The bottom line is that local authorities do not have the funding to maintain their housing stock. In the past loans were available from local authorities but they are now very difficult to access in regard to the purchase of houses. There are some good schemes through credit unions and other financial institutions whereby loans could be given, and I hope those financial institutions will provide the money for people who want to purchase their houses.

I do not believe the Minister of State answered my query on the voluntary housing sector. There are people in such houses who feel they should have the same opportunity as tenants of local authority houses to buy out their houses. I hope that will be considered.

Photo of Jan O'SullivanJan O'Sullivan (Limerick City, Labour)
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I agree with the Deputy that we need to give as much public information as possible. We certainly sought to do that and I put out a press statement in this regard. I hope the Deputy's raising of the issue today will give further information. I would encourage all public representatives to inform their constituents that the scheme is coming to an end. If people are interested, they should apply before the end of the year. Given that the length of time somebody has been in a local authority house is much more weighted in the old scheme than it will be in the new scheme, it is important people who have been in a house for a long time are aware the scheme is coming to an end.

With regard to the voluntary sector, at this stage I do not have any definite information but I will certainly come back to the Deputy when we have formulated particular proposals on that. Obviously, once we start drafting the legislation, we will have a lot more definite information with regard to the new scheme.