Affordable Housing Scheme – How the Local Authority Affordable Purchase Scheme Works

Affordable Housing Scheme (AHS)

The Affordable Housing Scheme, formally the Local Authority Affordable Purchase Scheme, helps people on moderate incomes buy new homes at reduced prices. It is delivered by local authorities and the Land Development Agency, and is sometimes called the Starter Homes Purchase Scheme.

The discount is not a gift. In return for the reduction in price, the local authority takes an equity share in your home equal to that reduction. Buy at a 20% discount and the local authority holds a 20% stake. That stake must be bought back after 40 years, or earlier if you sell, though you may repay it at any time before then.

Homes are made available in areas with the greatest housing need and where affordability is an issue. The scheme is aimed at first-time buyers and at ‘fresh start’ applicants.

How the Equity Share Works

• Maximum equity share: 40% of the market value of the home.
• Minimum equity share: 5%.
• Minimum repayment: €10,000 for a partial buy-back.
• Long stop date: the share must be cleared after 40 years.
• The share is a percentage of market value, not a fixed sum of money.

That last point is the one buyers most often misunderstand. Because the share is a percentage, the euro amount owed rises and falls with the property. If you bought in 2025 for €380,000 with a 20% local authority equity of €76,000, and you buy that share back in 2026 when the home is valued at €400,000, you repay 20% of the new value — €80,000.

The share must also be cleared if you sell, and on death.

Do You Qualify?

Income and purchasing power. Your gross annual income is multiplied by four to give your ‘purchasing power’. That figure must be less than 85.5% of the open market value of the affordable home. Alternatively, you can qualify by providing proof from a bank or financial institution that you cannot obtain a mortgage for 85.5% of the market value — for example, because of your age.

Deposit and savings. You need a minimum deposit of 10% of the purchase price. Savings are also assessed: you may hold the deposit plus an additional €30,000. Anything above that is added to your purchasing power, and if the total then exceeds 95% of the market value of the home, you are not eligible.

Property and status. You must be a first-time buyer or a ‘fresh start’ applicant. You are a fresh start applicant if you previously owned a home but no longer have a financial interest in it following divorce, separation or the end of a relationship, or following personal insolvency or bankruptcy. You may also qualify where the home you owned is no longer suitable for your household.

Age and residency. You must be over 18 and have the right to live indefinitely in Ireland. The home must be your normal place of residence.

The Affordable Purchase Housing Income Assessment Policy sets out how household income is assessed, including which payments are left out of the calculation.

Applying for an Affordable Home

There is no central application system. Each local authority runs its own scheme and manages its own applications. Homes are advertised on the local authority website, on affordablehomes.ie, in the local press and sometimes on social media, and you apply to each scheme as it is advertised, by its closing date.

You will generally need your PPS number, proof of gross annual income, evidence of your deposit and savings, mortgage approval in principle, and proof of your right to live in Ireland.

How applications are prioritised. Where there are more applicants than homes, the local authority applies its Scheme of Priority. At least 70% of units must be prioritised on the suitability of the property for the size of the household and on when eligible applications were received. The remaining 30% is prioritised on suitability and then on any additional criteria the local authority sets — residence in the local authority area, for example.

If you are successful, you receive an offer letter, are invited to choose your home, and will usually pay a booking deposit. You then sign an Affordable Dwelling Purchase Arrangement with the local authority, before or at the same time as the contract of sale with the developer. This is the contract that governs the equity share, and it is where a solicitor’s review matters most.

The Legal Agreement – What You Are Signing

The points below reflect the standard Affordable Dwelling Purchase Arrangement and the clause numbering commonly used in it. Agreements vary between local authorities, so your solicitor should check the clause numbers and the figures in Schedule 1 against your own contract.

Selling or remortgaging (clause 6). You need the council’s prior written consent to sell or remortgage, which cannot be unreasonably withheld. The council will ask for the details of the proposed transaction and will usually arrange an inspection before deciding, and the decision is given in writing within a reasonable period. On signing and exchange of contracts for a sale, the council issues a redemption figure, which is taken from the sale proceeds. If the proceeds, after the mortgage, legal fees and other necessary expenses, are not enough to repay the council in full, you remain personally liable for the shortfall.

Realisation events (clause 7). Certain events — sale, breach of the agreement, or abandonment of the property — trigger immediate repayment. The council issues a Realisation Notice giving three months to pay. If the property is abandoned or at risk of damage after that period, the council may enter and secure it, and may sell it on your behalf. Under clause 7.10.1 it can approach your bank directly for a redemption figure, and clause 7.12 allows it, once in possession, to give 21 days to remove personal belongings, after which they may be removed, sold or destroyed.

Occupancy and maintenance. Occupancy is restricted to you and the members of your household for as long as the council’s charge remains. The property must be kept in good and substantial repair, and any extension or structural alteration must comply fully with planning permission and building regulations. The council may inspect on reasonable notice (clause 3.8), the property must be insured at all times (clause 3.9), and after serious damage such as fire you are obliged to rebuild using the insurance payout (clause 3.10).

Making payments (clause 8). To repay in whole or in part you must give written notice stating the amount and the current market valuation. You then have three months to pay. Where the council initiated the valuation, the cost is shared equally (clause 8.6), and if you disagree with the council’s valuation you may instruct an alternative valuer from the council’s approved list (clause 8.5). The benefit of the agreement cannot be transferred or assigned to anyone else.

Title and security. Under clause 10.5, if your mortgage is repaid while the council’s share is still outstanding, the title deeds are held by the council rather than returned to you. Clause 11.2 appoints the council as your attorney for the purpose of executing the documents needed to register its security over the property.

Points to Weigh Up

• The amount you repay is linked to market value, so it increases if prices rise.
• You are personally liable for any shortfall on a sale.
• Consent is required before you sell or remortgage.
• The home must remain your normal place of residence while the charge is in place.
• Partial repayments are possible, but subject to the €10,000 minimum and a valuation.

Other Supports

The Affordable Housing Scheme can sit alongside other supports. You may also be able to use the Local Authority Home Loan and the Help to Buy Scheme. The separate First Home Scheme, in which the State and participating banks take a stake of up to 30%, works on a similar shared-equity basis but is a different scheme with its own rules.