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Shared Ownership Scheme

  1. WHAT IS SHARED OWNERSHIP?

    Shared Ownership is a system which facilitates access to full home ownership in two or more stages to persons who could not afford full ownership immediately. The applicant will initially acquire a share of between 40% and 75% in a house and rent the remainder from Sligo County Council with an undertaking to acquire the remaining equity within a 25 year period.

  2. WHO QUALIFIES?

    The following are eligible for consideration under the Shared Ownership System:  
    • Tenants and tenant purchasers of dwellings who intend to return their dwelling to the authority on providing a private house for their own occupation under the system.
    • Persons included by a local authority in its latest assessment of housing needs under section 9 of the Housing Act, 1988 or accepted for inclusion in the next such assessment.
    • Tenants of one year’s standing of houses provided by approved housing bodies under the Rental Subsidy Scheme, who intend to return their houses to the housing body on providing a private home for their own occupation under the system
    • Persons in need of housing whose household income in the preceding tax year comes within the following income limits.

      In the case of a single applicant/earner, the income for the tax year preceding the date of application must not exceed €40,000. However, where income of applicant exceeds €40,000 because of overtime earnings, the application may be considered if the average of annual overtime earnings in three preceding tax years, when added to the basic earnings in the qualifying year does not exceed €40,000.

      In the case of a joint application, the income limit will be calculated as follows: Principal earner’s income x 2.5 plus subsidiary earner’s income may not exceed €100,000. Overtime earnings apply as above if income limit is exceeded.
    • The Mortgage Allowance Scheme does not apply to houses purchased under the Shared Ownership Scheme.

  3. HOW TO APPLY?

    Applications should be made to the Housing Section, Sligo County Council, Riverside, Sligo. The local authority will then arrange an interview with the applicants in order to explain fully the Shared Ownership System, and the commitments that they will be entering into under the system. The local authority, when it has determined the applicant’s general eligibility, will issue a Certificate of Provisional Approval, which will establish entitlement to a shared ownership lease. When a house has been selected, the house must comply with the requirements of the authority and the terms of the system are otherwise met.

  4. WHAT KIND OF DWELLING MAY BE PURCHASED?

    Under the Shared Ownership System a new or existing house may be purchased, or an new house built. It is the applicant's choice but the local authority must be satisfied that the dwelling being acquired is reasonably priced, of suitable size and standard to cater for the applicant's household and free from structural defects. If it is a new house, the requirements as to construction standards, floor area etc., set out in the Department of the Environment's Memorandum HA1 must be met. An existing dwelling must have hot and cold water systems, a fixed shower or bath and an indoor toilet.

  5. WHAT HAPPENS WHEN AN APPROVED APPLICANT SELECTS A HOUSE?

    The applicant must go back to the authority that issued the provisional approval and pay them a deposit of at least €1,300 which will go towards paying for the applicant's share of the house. A deposit should not be paid directly to the builder or person selling the dwelling as it is the local authority that will initially acquire and pay for the house.  The authority will inspect the house. Sligo County Council also require that applicants have a structural report carried out on the proposed property, at their own cost, to satisfy themselves as to the condition of the house. If they are satisfied that it meets the requirements as set out in paragraph 4 above, they will issue a Certificate of Final Approval of eligibility under the system. (The deposit requirement may in exceptional circumstances be waived for local authority tenants and participants of the rural resettlement programme.)

  6. HOW DOES THE APPLICANT PAY FOR HIS/HER SHARE?

    The applicant's share in the ownership of the house will be paid for by:

    • The deposit of at least €1300
    • A mortgage loan - In the case of transactions undertaken under current arrangements, the local authority will advance the loan on the same terms as their ordinary house purchase loans. Repayments may be adjusted from time to time, as the interest rate is variable.

  7. WHAT RENT HAS TO BE PAID?

    Rent will be payable by the purchaser on the share in the ownership held by the local authority and will be calculated at 4.3% of the value of that share. The rent is payable monthly to the local authority and will be increased annually by 4.5% on the 1st July. The revised rent will apply for the year commencing on the 1st July each year. In all cases, a minimum of €2.00 per week rent is payable, including those who qualify for subsidy – see paragraph 11.

  8. WILL THERE BE TRANSACTION COSTS?

    No stamp duty will be payable but some legal etc. fees will be payable by the applicant. Every effort will, however, be made by the local authority to keep these to a minimum.

  9. MAINTENANCE AND INSURANCE COSTS

    Applicants will be responsible for the maintenance and insurance costs of the house.

  10. WHAT WILL IT COST MONTHLY?

    Examples of the calculation of the total outgoings (on both mortgage and rent) are set out on a sample Repayment Table attached.

  11. SUBSIDY TOWARDS PAYMENT OF THE RENT

    "Household Income" is the total gross income of the purchaser and his or her spouse or the joint purchasers.

    In order to qualify for rent subsidy, it will be necessary to complete the Rent Subsidy application form and submit details of income from all sources for the preceding tax year, e.g. P60 Social Welfare payments, Lone Parents Allowance etc. An applicant, once approved for the subsidy in a particular band, will not be moved to a lower subsidy band until any increase in income amounts to at least three times the amount of the consequent reduction in subsidy.

  12. WHEN AND HOW IS THE REST OF THE HOUSE PURCHASED

    A person occupying a dwelling under the Shared Ownership System will have the right to purchase the local authority's share of the ownership and acquire full ownership at any time. Alternatively, this may be done by purchasing from time to time additional shares of the authority's equity. The amount and frequency of such purchases is a matter for determination by the local authority.

    Interest will be charged on the Council’s share in line with the prevailing interest rate (currently 5.598% - mortgage protection included). The interest due will be balanced by the amount of rent paid and this will result in the Council’s share increasing or decreasing in the following year by the difference.

    Two different examples are set out below.


Year Council Share Balance Previous Year Interest Rate Interest Charged Rent Repayments Balance
1 €50,000 €50,000 3.70% €1,850.00 €2,150.00 €49,700.00
2   €49,700.00 3.70% €1,838.90 €2,246.75 €49,292.15
3   €49,292.15 4.20% €2,070.27 €2,347.85 €49,014.57
4   €49,014.57 4.70% €2,303.68 €2,453.51 €48,684.74
5   €48,864.74 4.70% €2,296.64 €2,563.91 €48,597.47


Year Council Share Balance Previous Year Interest Rate Interest Charged Rent Repayments Balance
1 €50,000 €50,000 3.70% €1,850.00 €2,150.00 €49,700.00
2   €49,700.00 4.70% €2,335.90 €2,246.75 €49,789.15
3   €49,789.15 5.30% €2,638.82 €2,347.85 €50,080.12
4   €50,080.12 5.30% €2,654.25 €2,453.51 €50,280.86
5   €50,280.86 4.80% €2,413.48 €2,563.91 €50,130.43


Notes on Table:

  1. The amount of rent will be increased by 4.5% with effect from 1st July each year.
  2. The mortgage repayments may go up or down depending on interest rates.
  3. Income tax relief is available on the interest paid on the mortgage element.
  4. Where the rent subsidy would apply, the monthly rent repayments would be reduced as appropriate, which in turn would reduce the monthly repayments shown on Table.
Purchasers of additional shares may be financed by raising a further mortgage loan or by cash payments. Applicants will be required to buy out the full ownership within a 25 year period. However, there is no requirement to repay all capital outstanding on the mortgage within the 25 year period. In fact the occupier could buy out the remaining equity when the original mortgage is paid off.

Important Note

Your home may be at risk if you do not keep up payments on the mortgage/rent required under the System. 


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