Affect Discount Amount
Determining Discount Amount
The discount amount you may be eligible for your property will be determined by multiple factors, including but not limited to the following:
If any of the tenants applying under the Right to Buy scheme have already purchased a discounted property under the same scheme or similar, this will reduce the discount amount. In the event that the previous discount was offered as part of a shared property purchase, a proportion of the discount will be taken away from the discount on the new property for each current applicant.
Cost floor rule
The ‘cost floor rule’ typically applies when a property has recently been built or purchased by a council, or significant money has been spent repairing or maintaining it.If the cost floor is the greater than the discount value, the discount could be reduced to zero. In which case, the tenant will be required to pay the normal market price for their property.
The qualifying period during which the cost floor rule applies with council properties is the 10 years immediately prior to the RTB application being submitted, or 15 years for council properties acquired or built after April 2, 2012.
Repayment of Discount
It is important to note that if you purchase your property using a discount under the Right to Buy scheme, you will be liable to repay part or all of the discount if the property is sold within a given period after the RTB transaction is completed. This timeframe can change but as a guide line if the property is sold within the 1st year following the purchase, all the discount will require repayment, if the property is sold between years 1 and 2 then 2/3 of the discount will require repayment, if sold within years 2 and 3 then 1/3 of the discount will require repayment and if sold after the 3rd year, no discount will require repayment.
For more information on the various factors than can affect the discount amount on your home, contact a member of the team at UK Property Finance anytime.