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Croí Cónaithe Scheme
The Croí Cónaithe (Towns) Scheme is an Irish government initiative designed to support the construction of new homes in urban areas where housing demand is high but development is not financially viable.
This article focuses on new build projects and the clawback arrangements attached to them.
Under the Croí Cónaithe Cities Scheme, the government provides a subsidy of up to €144,000 per apartment to developers.
This is to bridge the gap between construction costs and the market value of the completed units.
The scheme promotes the delivery of owner-occupier homes in city centres to help rejuvenate urban living.
To ensure public funds are used appropriately, a clawback clause is attached to each funded unit. This clause stipulates that if the home is sold or let within a certain period (usually 10 years), a portion or all of the subsidy must be repaid to the State. This prevents profiteering and supports the scheme’s long-term goal of sustainable home ownership.
A developer receives a €100,000 subsidy under the Croí Cónaithe Scheme for a new apartment in Limerick. The unit is priced at €280,000 for sale. A first-time buyer secures a mortgage of €200,000 and uses personal savings of €80,000 to complete the purchase.
After 3 years, the buyer decides to sell the property for €320,000. As the sale occurs within the 10-year clawback period, the following applies:
Purchasers must be clear and fully aware of their obligations in buying under this scheme. A breach of the agreement, such as renting out the property without approval, may trigger full subsidy repayment and additional penalties.
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