The Croí Cónaithe (Towns) Fund Scheme: grant for vacant or derelict properties

In 2022 the Government announced a new grant to help first-time buyers purchase a vacant or derelict property and turn it into a home without the need for planning permission.

The so-called Croí Cónaithe (Towns) Fund Scheme offers eligible first-time buyers a grant of up to €50,000 and is yet another scheme to try tackle the nationwide housing crisis.

€50 million in funding has been allocated to local authorities under the scheme with the aim of delivering 2,000 homes by 2025.

Here's everything you need to know.

Why introduce this grant?

The grant is another part of the Government's strategy to tackle the ongoing housing crisis and is targeted at towns and villages where vacant and derelict buildings could be repurposed as residential units.

The aim of the new grant is twofold: to provide more assistance to first-time buyers (especially those struggling to find properties in their price range), and to tackle the issue of vacant and derelict properties which are a blight on many towns and villages nationwide.

According to Revenue, 57,206 properties were reported as vacant by their owners on November 1st 2021 - while the last census reported that a total of 166,752 vacant homes existed nationwide.

So what grant figures have been announced?

Grants available

A maximum grant of €30,000 is available to those looking to refurbish a vacant property to use as their main home. This includes the conversion of a non-residential or commercial property into residential use.

An additional top-up grant of up to €20,000 is available where the property is deemed to be structurally unsound or dangerous i.e. derelict, bringing the total available grant for a derelict property up to a maximum of €50,000.

However there are concerns that this isn't enough to keep up with rapidly rising construction costs and the Government has promised to increase this amount over the coming months.

If you're looking to access the top-up grant, an independent report must be undertaken by a quantity surveyor or engineer to confirm the property is unsound. The report must then be submitted along with the application. Those applying will be required to indicate in their application whether or not they are seeking the top-up grant.

The grant includes the cost of VAT for the works carried out.

What are the eligibility criteria?

Here are some of the most important criteria to avail of the Croí Cónaithe scheme.

• Applicants must be first-time buyers. Divorcees or people who have been declared bankrupt and who may previously have bought a home can also apply.  
• Applicants who have particular needs such as those with disabilities or older people can apply.
• Applicants who are moving from their current home which they are selling or have sold and want to live in a town or village setting may also apply.
• Applicants must be refurbishing a home that has been vacant for at least two years and the property must have been built before 2007 - originally this was 1993. 
• You must live in the home as your main residence for at least five years.
• You must be buying a property in a qualifying town or village. Initially the scheme will not apply to towns within the city and immediate suburbs of Dublin, Cork, Limerick, Waterford, and Galway.
• Your tax affairs must be in order with Revenue.

There have also been calls for the scheme to be extended to include properties that would be made available for rent rather than just those that are to be owner occupied. The Government has agreed to this but the exact details are still to be worked out. 

The relevant local authority will also carry out a reasonable cost assessment on the works you do and may not approve payment for some work if they think it's excessive. In other words, you can't go and blow €30k on new windows!  

Other important eligibility criteria can be found on www.gov.ie.

However, despite this new grant being announced, it won’t necessarily make it easier for people to get a mortgage...

Getting a mortgage on a derelict property

There are some difficulties with the new grant.

The main issue is around getting mortgage approval. Just because you’re eligible for the grant doesn’t mean a mortgage lender will be happy to give you a loan. Lenders may not be very willing to lend against derelict properties.

When trying to secure finance for a new home, it’s important to remember that you’ll be underwritten twice in the mortgage approval process - firstly on your financial situation and secondly on the property you’re looking to buy. And some lenders may not approve the second part of the underwriting process if you're buying a vacant or derelict property. 

Another thing prospective homeowners need to consider is that if you’re thinking of turning a derelict property into the home of your dreams, you’ll need to hire the relevant tradespeople, which is fairly tough right now to say the least.

Is there any clawback?

Yes. If you sell the property within five years the full amount of the grant will be clawed back.

If you sell the property after five years and before ten, 75% of the amount of the grant will have to be repaid.

Nothing will be clawed back if you sell after ten years.

Can I avail of other grants?

Yes. The SEAI Better Energy Home Scheme Grant, which covers payment for things such as attic insulation, cavity wall insulation, internal and external wall insulation, and the installation of heat pumps and solar panels may also be applied for.

However you can't claim for the same thing twice under both schemes. 

Is this a good proposition?

Only time will tell how effective the new grant will be, however it’s clear the grant favours those who have plenty of time and money on their hands.

Not every first-time buyer will be in a position to be able to afford to renovate a property, never mind have the time and energy it takes to turn something derelict into a loving home, especially families working on a budget.

The current €50,000 grant is also too little. Though as mentioned above the Government has committed to addressing this. Which is vital as a recent study of 20 derelict and vacant properties by the Society of Chartered Surveyors Ireland (SCSI) found that even if the grant were increased to €100,000, around 50% of properties wouldn't be financially viable to renovate. 

It's clear current incentives and supports in place are not at a satisfactory level to make a meaningful difference to the current levels of vacant stock.

Chartered Planning and Development Surveyor, Lisa Rocca

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