Proposals for government-backed home loan for people looking to purchase vacant properties will go to Cabinet 

Housing Minister Darragh O'Brien is seeking approval for the extension of the Local Authority Home Loan to people seeking to finance the purchase and renovation of derelict or non-habitable properties. Picture: Sam Boal/ RollingNews.ie

Proposals for a new government-backed home loan for people looking to purchase vacant properties will go to Cabinet today.

Housing Minister Darragh O'Brien is seeking approval for the extension of the Local Authority Home Loan to people seeking to finance the purchase and renovation of derelict or non-habitable properties.

The Local Authority Home Loan is a Government-backed mortgage for those who cannot get sufficient funding from commercial banks to purchase or build a home. 

It is available nationwide from local authorities for first-time buyers and fresh-start applicants. 

The loan can be used both for new and second-hand properties or to self-build. 

Currently, only habitable properties meet the property eligibility of the Local Authority Home Loan. 

The memo going to Cabinet seeks approval to extend it to cover the purchase or renovation of non-habitable homes that are potentially eligible for the Vacant and Derelict Property Grant. 

Sources said the idea will take a number of months to develop so it is expected that it will be available in the second quarter of 2024.

The scheme enables first-time buyers to borrow up to 90% of the value of their home, up to €360,000 for properties in Dublin, Kildare, and Wicklow, dropping to €330,000 in Cork, Galway, Louth, and Meath and dropping further for other counties. 

Those applying must provide proof of insufficient mortgage offers of finance from two other financial providers.

Government sources said that the move would help bring derelict homes back into use. 

They say that when the government launched vacant and derelict property grants, just over a year ago, there was an initial target associated with that scheme of 2,000 homes, and demand for this grant has been strong, with over 5,100 applications to date to local authorities and over 2,400 approved. 

As a result, that target is being doubled from 2,000 to 4,000.

Mr O'Brien will also bring a memo for information to Cabinet on the Rent-A-Room scheme. 

It will see Rent-a-Room tax relief extended to local authority tenancies with effect from December 1 on an administrative basis initially, targeting the provision of additional rooms for third-level students. 

The rent-a-room relief lets homeowners earn up to €14,000 per year tax-free if they rent out a room in their home to private tenants.

A person does not need to pay tax on this income up to €14,000 and social welfare entitlements and medical card eligibility will not be affected.

After 12 months its operation will be reviewed, then if recommended, it could be extended on a full statutory footing.

Separately, Energy Minister Eamon Ryan will seek approval for the ‘Energy Security in Ireland to 2030’ report at Cabinet. 

It outlines a new plan to ensure energy security in Ireland for this decade while ensuring a sustainable transition to a net zero energy system by 2050.