Up to 20 per cent of development land or new houses must be made available for social and affordable housing, giving hope to those who thought they could never afford to purchase their own home, writes Clare O'Dea

Are you a single person earning less than €31,743 without rich parents? If so you've probably given up on the dream of owning a home. Your pessimism is justified but there is one thing you should do before resigning yourself to long-term insecurity in the rental sector - get on the affordable housing waiting list.

County councils and corporations now have two types of housing lists.

The first is the old housing waiting list of more than 50,000 people hoping one day to rent a house or flat from the local authority. The other is the affordable housing list for those who wish to purchase all or part of a property with the assistance of the local authority.

And where will these properties come from? Part five of the Planning and Development Act 2000 obliged each local authority to adopt a housing strategy last year. Development plans were also to include a provision that up to 20 per cent of either the development land or houses developed on the land be made available for social and affordable housing purposes.

Because of previously valid planning permissions, most of the new developments coming on the market do not include social or affordable housing, but this will change as older permissions run out.

Planning permissions issued since the adoption of the housing strategies - the dates vary in each local authority area - include the social housing provision.

A spokesman for the Irish Planning Institute (IPI) said builders could comply with the new legislation in three ways.

They could sell the agreed percentage (decided in the housing strategy and varying from area to area) of the finished houses in a development to the local authority at cost price. Alternatively they could sell the same percentage of the developed sites or the development land.

"This policy will have a positive impact on access to housing but the real difficulty is how long it will take for properties to come on stream, given how convoluted the procedures are," the IPI spokesman said.

So patience is required. The important thing is to get your name down now. The Affordable Housing Scheme, which aims to help lower-income households buy their own homes, has been in existence since March 1999.

Local authorities will generally advertise the availability of houses for sale under this scheme in the local press. If there are more eligible applicants than houses, the local authority will determine the order of priority, taking account of household circumstances and other factors.

This is how it works for the chosen ones. The house or apartment is bought at cost price with a mortgage provided by the local authority. The loan can be up to 95 per cent of the price of the house. This is subject to repayments being no more than 30 per cent of the net household income.

For single-income households, the income threshold to qualify for this and other local authority housing schemes is €31,743 gross in the last income tax year.

With two-income households you multiply the gross income (before tax) of the higher earner in the last income tax year by 2.5 and add the gross income of the other earner in the last income tax year. If the answer is €79,358.63 or less, you are eligible.

Because the last tax year was the once-off April to December "short tax year", there is a little extra calculation to be done to get the 12-month equivalent.

Various groups are exempt from the income test, including approved applicants for local authority housing, tenants and tenant purchasers of local authority dwellings, and tenants for more than one year of Rental Subsidy Scheme housing surrendering their dwellings.

As a first-time buyer, you will be entitled to a first-time buyer's grant of €3,809. Households may also be entitled to a mortgage subsidy or the Mortgage Allowance Scheme. A minimum deposit of €2,539.48 must be paid to the local authority.

But what happens a few years down the road and how do you stop people from abusing the scheme?

Well, if you sell your house within 10 years, you will have to pay the local authority the difference between the sale price and the market value of the house.

This amount will reduce by 10 per cent each year after that, so if you sell after 20 years, you will not have to pay anything to the local authority.

Roughly the same qualifying conditions apply for the shared-ownership scheme. Once an application is approved by the local authority, and a property is found and deemed acceptable, the local authority will buy it and grant you a shared-ownership lease.

Initially, ownership of the house is shared between the householder and the local authority, with a view to the former eventually buying out the latter.

From the start, you must purchase at least 40 per cent of the house and rent the remaining share from the local authority.

The advantage of the deal is that the individual or family can enjoy the benefits of home ownership but have more affordable outgoings than with a conventional mortgage.

More than 10,000 households have bought properties through the scheme since its inception in 1991.

The arrangements for shared ownership vary, depending on the local authority. In some cases, a pool of houses is identified by the council or corporation and approved households can apply for one.

In other areas it is the applicant who selects a new or second-hand house or has one built, and the local authority comes on board to finance the purchase. Some areas may operate both systems, depending on the volume of applications.

The rental and mortgage repayment cannot exceed 35 per cent of your net income. Rent is calculated at 4.5 per cent of the cost of the rented share per annum and the individual is obliged to buy out the rented share within 25 years.

You don't have to live in the local authority area in which you make your application but approval is not transferable from one area to another. There is a maximum property value allowable within the scheme, which varies from area to area, to reflect regional differences in property prices.

The mechanisms for increasing the householder's share of the property over time are very flexible and the rented share of the house can be bought out in full at any time.

The new provision will deliver housing for thousands of fortunate households in the coming years but this is more than a simple issue of giving people a start in life. The mix of housing types in new developments is also a social experiment and will be an interesting one to watch.