Tenant Purchase Scheme

Incremental Tenant Purchase Scheme for existing local authority houses

The Tenant (Incremental) Purchase Scheme (T(IPS)) allows long-term tenants of local authority houses to purchase their homes at a discounted price. This scheme is designed to support social housing tenants in becoming homeowners, while ensuring the long-term affordability and responsible use of the housing stock.

How It Works

The tenant buys the home at a discount based on income. In return, the local authority retains an equity share equal to the discount. This share reduces gradually over time, typically 20 to 30 years, provided the homeowner continues to meet the scheme’s terms, such as occupying the property as a principal residence.

Application Process

To participate, tenants must apply to their local authority, meet eligibility criteria (including a minimum of 10 years of tenancy and income threshold), and be in good standing. After valuation, a purchase offer is made and the transaction proceeds through legal conveyance.

Expenses Involved

Buyers are responsible for the discounted purchase price, legal fees, and stamp duty. Since the purchase is directly from a local authority, stamp duty is a fixed €100.

Local Authority Retained Interest

The equity share retained by the local authority is registered against the property. This share reduces each year the buyer complies with the scheme’s conditions. It cannot typically be bought out early, but it extinguishes over time or is repayable on early sale.

Further Notes on Stamp duty and Claw back

Affordable Housing Scheme & Tenant (Incremental) Purchase Scheme

Clawback

If the homeowner sells the property before the end of the equity period, or breaches scheme rules, the local authority may recover its outstanding equity share. This protects the public investment and ensures the sustainability of the scheme.
Under the Affordable Housing Scheme, clawback provisions ensure that the local authority can recover the public subsidy if the homeowner sells the property or breaches terms prematurely.
If the property is sold, the homeowner must repay the equity share retained by the local authority. The amount repayable is calculated based on the market value at the time of sale.
There is no fixed time limit for clawback under this scheme, the equity share remains in place until repaid voluntarily or triggered by sale or breach.
Under the Tenant (Incremental) Purchase Scheme, clawback operates over a defined period, typically 20 to 30 years.
Each year that the homeowner remains compliant with scheme rules (e.g. occupying the home as their principal residence), the local authority’s equity share reduces incrementally.
If the homeowner sells before the end of this period or breaches terms, the local authority can recover the outstanding portion of the equity share based on the current market value.

Stamp duty

Stamp duty on the purchase of a residential property under both the Affordable Housing Scheme and the Tenant (Incremental) Purchase Scheme is generally fixed at €100.
This is provided for under Section 106B of the Stamp Duties Consolidation Act 1999, which states that stamp duty on instruments for the transfer of residential property by a local authority is capped at €100.
The relevant text from Section 106B reads: “The amount of stamp duty chargeable on an instrument effecting the sale of a residential property by a housing authority… shall be €100.”
This provision applies where the purchaser is an individual and the property is to be used as their principal private residence.
Where the property is not transferred directly from a local authority (e.g. a private developer or approved housing body), standard residential rates of 1% may apply instead.

Find out more about Afordable Housing Scheme >>

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