Colm Burke (Fine Gael)
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I realise the Minister of State has had a long day and apologise, therefore, for detaining him so late in the evening. A large number of people in local authority housing wish to purchase their home, but there is no scheme in place to allow them to do so. In many cases, tenants have been living in the same property for a long time but there is no private housing available in the area. There are several advantages to introducing a scheme to allow such persons to purchase their home from the local authority. First, it will provide moneys for councils. Second, the people who purchase their homes will expend money in refurbishing them. Third, there is a significant social benefit in having a mix of private and local authority housing in an estate in terms of ensuring stable communities and so on. I have seen this happen with older estates in Cork city which were built as local authority housing but have now largely passed into private ownership.

Under the previous scheme regulations, tenants who purchased their home from a local authority and wished to sell it within 25 years had to secure the consent of the local authority to do so. An additional requirement was that the person to whom the former tenant was selling must be in need of housing. I have no difficulty with these regulations being retained. The time has come to give serious consideration to introducing a scheme that will allow local authority tenants to purchase the homes they have occupied for lengthy periods. People in those circumstances want to continue to live and work in the area they call home.

Paudie Coffey (Waterford, Fine Gael)
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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.

Colm Burke (Fine Gael)
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I thank the Minister of State for his comprehensive reply and am delighted the new scheme will be up and running shortly.