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New affordable housing plan will see State take 30% stake in homes of first-time buyers

The affordable housing scheme will go to Cabinet next week.

Image: Shutterstock/Albert Pego

THE GOVERNMENT’S NEW affordable housing plan that will see the State take up to 30% equity in a home with a first-time buyer is set to go to Cabinet next week.

The long promised new scheme will have no arbitrary salary caps, Housing Minister Darragh O’Brien has said.

The introduction of a shared equity scheme will be in conjunction with the Help-To-Buy initiative and will assist those buyers currently locked out of the market.

Under the scheme the state takes an equity loan share of up to 30% in your home while the owner takes out a mortgage with a bank on the remainder as usual.

It will be open to all new build homes subject to price caps and is targeted at first time buyers with some exemptions for separated individuals.

The government believes the new support will save potential owners up to €11,000 per year in rent and in the long term save the state rental support payments.

It is expected that it will also be subject to house price caps.

While the final details of the scheme are being negotiated with stakeholders and will be subject to state aid approval from the EU Commission, the plan is set to be approved by Cabinet in next Tuesday and will come before the Dáil in early 2021.

The launch of the scheme will take place in the summer 2021.

The minister says the scheme will boost housing supply as it helps to guarantee sales by bridging the gap between the Central Bank rules and the actual cost of a home for ordinary income families.

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An initial €75 million has been set aside by the government for the scheme for 2021, and will be boosted with additional private investment.

The minister says this is separate to the €135 million being invested in the cost rental affordable measure and €150 million for the Help-To-Buy scheme.

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