Paudie Coffey (Waterford, Fine Gael) | Oireachtas source

I thank the Senator for raising this important issue and am pleased to report progress on the matters he has raised. The Housing (Miscellaneous Provisions) Act 2014 enacted earlier this year provides for a new scheme for the purchase of existing local authority houses to replace the 1995 tenant purchase scheme. The Social Housing Strategy 2020 approved by the Government and published last week includes a commitment to introduce the new tenant purchase scheme by the second quarter of 2015.

The new scheme will operate along incremental purchase lines, similar to the two purchase schemes in place for local authority apartments and new local authority houses. This purchase model involves discounts for purchasers linked to household income and a discount-related charge on the property that reduces to nil over a "charge period", unless the house is resold or the purchaser fails to comply with conditions of the sale. Where the tenant purchaser resells the property before the end of the charge period, he or she will be required to pay back to the housing authority a portion of any profits arising from the sale, thereby compensating the State for its loss on the original sale of the property and generating funds for the local authority to invest in new social housing or refurbishment of existing housing.

Under the 1995 scheme, discounts were related to the length of tenancy rather than income, with no provision for the State to share in any profits arising from the resale of dwellings. In contrast, discounts under the new incremental purchase model are much higher than under the 1995 scheme and, because the discounts are income-related, they will enable tenants to purchase their homes earlier in their tenancies than was the case under previous schemes. The new scheme will encourage tenant purchasers to remain in their dwellings for a reasonable length of time after purchase, thus fostering stable and sustainable communities.

The detailed terms of the new scheme will be prescribed in regulations under the 2014 Act, including the minimum income threshold for eligibility and the income-related discounts to be provided. While no decision has been taken on the details of the new scheme, the existing incremental purchase schemes are indicative of what may be put in place. Under these schemes, tenants must have a minimum gross income with their spouse or partner of €15,000 and may qualify for discounts off the purchase price of 40%, 50% or 60%, depending on their income. The period of the local authority charge is 20, 25 or 30 years, depending on the discount given to the tenant purchaser.

The Senator can look forward with confidence to a new tenant purchase scheme that will enable local authority tenants to purchase their dwellings at a substantial discount, while also promoting sustainable communities and generating additional funding for local authorities to use for social housing purposes.