Qualifying and Non-Qualifying Costs

This list of qualifying and non-qualifying costs - cannot be considered exhaustive and the Association is advised to seek the guidance of the NIHE (DPG) on items over which there is any doubt before expenditure is incurred.

Qualifying Costs - the capital costs associated with a scheme which qualify for Housing Association Grant can be found at Calculating Grant - Table A. Breakdown of TCI Component Cost Elements

[Note: The qualifying on-cost is met not on the basis of actual itemised on-costs but in aggregate by a percentage add on to the other qualifying capital costs.

Non-Qualifying Costs - any capital costs associated with a scheme which do not qualify for grant, due to any of the following:

1. Inadmissible Items

Excluded Properties such as:

  • Estate offices, factories, stores, letting offices;
  • Doctors’ surgeries, clinics;
  • Police stations, public libraries, bus shelters;
  • Shops, restaurants, public houses, offices;
  • Buildings to house standard NIE sub-station or transformer equipment;
  • Maintenance depots, tools, plant and vehicles;
  • Garages, carports (other than carports associated with Wheelchair dwellings and adaptations);
  • Separate laundry blocks and related equipment;
  • Sport clubhouses and facilities;
  • Places of Worship;
  • Education facilities;
  • Public Conveniences; and
  • Housing for private rent or sale including applicable element of communal/external areas in mixed tenure schemes.

Excluded Works such as:

  • Works to adjacent land or property not in Association ownership (except making good as a result of demolition, building works, etc)
  • Historical works connected to land banking eg temporary metal fencing

Services such as:

  • Non-Procurement compliant commissions for site finding; and
  • Management and external marketing costs linked to housing for private rent or sale.

2. Exceed the Department’s requirements:

  • Floor Area exceeding the Departmental TCI area/Cost bands;
  • Level of costs which exceed those normally expected for grant purposes eg exceptionally high tender level;
  • High specification items unless adequately justified on a Value for Money basis over the structural life of the property or required to comply with a statutory obligation;
  • Chimneys unless required to comply with a statutory obligation;
  • Utility rooms and en-suites;
  • White goods in general needs housing;
  • Carpets, furniture and fitted wardrobes;
  • Painting internal walls and ceilings;
  • Garden sheds or stores;
  • Facilities for care purposes rather than housing.

3. Not for the sole use of residents

Items of work do not qualify for grant unless Associations can clearly demonstrate that they are for the sole use of the residents.

Exceptions to the rule are where the cost of such works are shared on an equitable basis with other users or to comply with any statutory obligations which may have been imposed. In such instances prior approval, including cost apportionment, must be obtained by NIHE (DPG) in advance. For example:

  • Works to any roads which do not exclusively serve the housing development;
  • Landscaping to areas of land which lie outside the boundaries of the site;
  • District heating systems;
  • Sewers and sewage disposal works;
  • Special refuse treatment buildings;
  • Playparks including equipment;
  • Community halls, clubrooms, recreation rooms and
  • Day facilities for non-residents in supported housing schemes

Associated Costs - if any non-qualifying costs are included in the construction costs a proportion of the following costs may not qualify for grant:

  • Acquisition cost;
  • Substructure and other Superstructure elements;
  • Cost of providing services and site development works;
  • Fluctuations and/or variations to the works contract.

[Note: For the method of apportioning non-qualifying costs, see Apportionment of Non-Qualifying Costs below.]

Scheme Approval procedures - when completing its application for Project Approval the Association should identify and quantify any non-qualifying items included in the total scheme costs figure.  The Association must deduct the amount of the non-qualifying costs from the total scheme costs to arrive at the figure upon which grant is sought.

More information:

TA1 Explanatory Notes
NT1 Explanatory Notes

For information, see Forms

Identifying Further Non-Qualifying Costs - should the NIHE (DPG) identify any further non-qualifying costs, whether in the form of inadmissible items or because the NIHE (DPG) cannot subscribe in full to the Association’s proposed costs for grant, the means of funding these (if they are to remain in the project) will be discussed with the Association prior to any approval.  The NIHE (DPG) will not make grant or loan finance available for the cost of non-qualifying items.

Apportionment of Non-Qualifying Costs - the non-qualifying element of costs will be determined as follows:

  • Land/property purchase price - the Association should confirm the Valuer’s assessment of the non-qualifying element.
  • Works cost - the non-qualifying works element will be the cost of the non-qualifying items identified by the Association in its Project Approval application plus any further non-qualifying items identified by the NIHE (DPG). The cost of the non-qualifying costs should be confirmed by the Association’s Cost Consultant. No grant will be advanced in respect of these costs.  In making its application for grant at Final Cost Assessment stage, the Association should ensure that no further non-qualifying items eg resulting from variations have been introduced for grant funding during the development – the Association is required to so certify at Final Cost Assessment stage.
  • Standard On-Cost - where non-qualifying costs exist in either the purchase price and/or the works cost, the standard on-cost percentage will only be applied to those costs deemed to qualify for grant.
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