The Shared Ownership Scheme was aimed at people who could not afford to buy their entire home in one go. It has now been stood down for new applicants. The rules of the scheme continue to apply for people who used it to start buying a home. An Incremental Purchase Scheme will provide another way for people on low incomes to start buying a home, subject to certain conditions.
You may increase the proportion you are buying at any time, either by adding to your mortgage or paying cash. You must buy the full ownership within 30 years. This does not mean that you have to repay all capital outstanding on the mortgage within the 30-year period. You may take out another mortgage to buy out the remaining share when the original mortgage is paid off.
You can sell the house or apartment at any time. The local authority will, of course, be entitled to claim the value of the proportion it owns at the time of sale. If it provided the house or apartment at a discount from the market value, you must refund a proportion of this discount, depending on how long you have lived in it.
Transactions under the Shared Ownership Scheme are exempt from stamp duty. Local authorities are also required to keep legal costs to a minimum.
If your home is in Shared Ownership with the local authority on the liability date for the Household Charge (1 January in 2012), it is exempt from the Household Charge, as the local authority still retains an ownership stake in the property. You do not have to register your home in order to claim the exemption.
The Shared Ownership Scheme allowed people to start by buying a proportion of a home, increasing that proportion in steps until they owned it all, and with ownership shared between the buyer and the local authority. Buyers would make payments on a mortgage for the part being purchased and pay rent to the local authority for the other part at a rate of 4.3%.
To avail of the scheme, you had to:
If the local authority was satisfied that you could afford the mortgage repayments and the rent, it would buy the house or apartment and grant you a shared ownership lease. From the start, you had to buy at least 40% of the house or apartment.
Some local authorities operated an upper limit on the amount that could be borrowed under the scheme. This amount varied, depending on the location of the property and the local authority involved.
Local authorities could also set a maximum percentage of income that could be apportioned to rental/mortgage payments. In each case the long-term viability of the mortgage/rental payments was the key concern.
To qualify for the Shared Ownership Scheme you had to be:
The income test only applied to the first category; if you were covered by the second, third or fourth category, you were exempt from the income test.
You had to buy at least 40% of the price the local authority paid for the house/apartment.
This amount depends on the cost of the house, the proportion you are renting and current interest rates.
If your household income in the last income tax year was less than €28,000 per year, you could qualify for a rent subsidy of between €1,050 to €2,550 per year as long as the subsidy would not reduce the rent below €1 per week.
The local authority could waive the €1,270 deposit if: