Arthur Spring (Kerry North-West Limerick, Labour)
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522. To ask the Minister for Environment, Community and Local Government if all local authorities operate the same conditions and standards in relation to the shared ownership scheme; and if the consumer price index valuation is attached to every shared ownership property throughout Ireland. [48858/14]

Alan Kelly (Tipperary North, Labour)
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Two Shared Ownership schemes were in operation until 2011, when the decision was taken to stand down all affordable housing schemes. Under Shared Ownership, a house was acquired by a local authority and leased to a shared owner, who purchased at least 40% of the value of the house and rented the remaining equity from the local authority. The local authority financed the transaction by borrowing from the Housing Finance Agency. The shared owner was required to purchase full ownership within 25 years.

An Index Linked Shared Ownership Loan was introduced in 1991.  The loan is split between annuity and rental portions.  The annuity loan is repaid on the prevailing variable interest and capital basis.  Rent is charged at 4.3% on the rental equity balance.  The rental equity balance is adjusted in line with the Consumer Price Index (CPI) each year.

In January 2003, the Shared Ownership scheme was revised for all loans taken out from that date.  The loan continued to be split between annuity and rental portions.  Again, the annuity loan is repaid on the prevailing variable interest and capital basis.

The main difference in the shared ownership schemes is the treatment of the rental equity. In the original scheme, the rental equity balance is index linked to the CPI. In the post-2003 scheme, the rental equity balance is treated as a capital loan and can be paid down over time if the rent repayments exceed the interest amount due.

It is a matter for each local authority to administer the existing pre- and post-2003 Shared Ownership Schemes in line with the related Circulars issued by my Department.