Darragh O'Brien (Dublin Fingal, Fianna Fail)
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The Tenant (Incremental) Purchase Scheme provides for the purchase by eligible tenants of local authority houses which are available for sale under the scheme. All applications for the Scheme must satisfy the requirements outlined in the Housing (Miscellaneous Provisions) Act 2014 and the associated regulations.

The clawback, otherwise known as the incremental purchase charge, is an integral component of the scheme. Under the scheme, based on a tenant’s reckonable income, the tenant receives a discount of 40%, 50%, or 60% on the purchase price of the house and the local authority places an incremental purchase charge on the house of the proportion of its value equal to the discount. The charge period is dependent on this discount given and may be 20, 25, or 30 years. This charge will reduce gradually by 2% every year over the duration of the charge period until it reaches zero, subject to the applicant complying with the conditions of the scheme. For example, if the incremental purchase charge placed on your house is 50%, it will reduce gradually by 2% per year over 25 years until it reaches zero.

In addition, the incremental purchase charge encourages tenant purchasers to continue to reside in their house for a reasonable period after purchase. It also enables housing authorities to share in any profit on the resale of the house by a tenant purchaser in the initial years after purchase, thus generating funds for the provision of new social housing, or upgrading existing social housing.

It should be noted that applicants may obtain finance through a variety of means, including through a financial institution, local authority home loan, or their own resources.

My Department monitors schemes on an ongoing basis to ensure that they remain effective and sustainable. Together with the Housing Agency, who assist local authorities with the operation of the scheme, my Department is available to answer questions which banks and other lending institutions may have regarding the scheme. However, no changes to the incremental purchase charge are being considered at this time.