Recent changes to the right to buy legislation
Recent changes to the Right to Buy legislation came into force on January 18, 2005. Find the paragraph (A, B or C) that applies to you to see how the changes affect you.
A. Tenancies granted BEFORE January 18, 2005 and Applications received BEFORE January 18, 2005
- Qualifying period: to qualify you must have been a secure tenant for two years.
- Maximum discount: the maximum discount you are entitled to is £16,000.
- Repaying the discount: if you sell your property within the first year of purchasing, you will have to repay all of the discount. If you sell in the second year, two thirds must be repaid; and if you sell in the third year, one third must be repaid. After three years you can sell without repaying any discount.
B. Tenancies granted BEFORE January 18, 2005 and Applications received AFTER January 17, 2005
- Qualifying period: to qualify you must have been a secure tenant for two years.
- Maximum discount: the maximum discount you are entitled to is £16,000.
- Repaying the discount: the discount repayment period is extended to five years. If you sell within the first year, you will have to repay all of the discount. The amount of discount repayable then reduces by one fifth for each year. After the fifth year you can sell without repaying any discount. In addition to the repayment of the discount, if you sell within five years of purchasing under the Right to Buy, you will also be required to pay a percentage of the price you sell your property for. Further details are available in the booklet “ Your Right to Buy your Home ” published by the Department of Communities and Local Government
- Landlord’s right of first refusal: if you or any successor in title wishes to sell the property within the first 10 years of the Right to Buy sale, the council (or to someone nominated by the council) must first be given the option to re-purchase the property.
- Deferred resale agreements: if you enter into an agreement to sell your property during the discount period following your purchase under the Right to Buy, you may be liable to repay some or all of your discount even if the sale date falls after the five-year period. Furthermore, if you make such an agreement prior to exercising your Right to Buy , you will be liable to repay all of the discount immediately upon completion of your purchase.
- Notice to complete: section 140 of the Housing Act 1985 is amended so that a landlord can now serve a notice to complete on a tenant who has failed to complete the Right to Buy purchase three months after the landlord has served a Section 125 Notice (Formal Offer of Sale).
C. Tenancies granted AFTER January 17, 2005 and Applications received AFTER January 17, 2005
- Qualifying period: to qualify you must have been a secure tenant for five years.
- Maximum discount: the maximum discount you are entitled to is £16,000.
- Repaying the discount: the discount repayment period is extended to five years. If you sell within the first year, you will have to repay all of the discount. The amount of discount repayable then reduces by one fifth for each year. After the fifth year you can sell without repaying any discount. The repayable discount is based on a percentage of the re-sale price.
- Landlord’s right of first refusal: if you or any successor in title wishes to sell the property within the first 10 years of the Right to Buy sale, the council (or to someone nominated by the council) must first be given the option to re-purchase the property.
- Deferred re-sale agreements: if you enter into an agreement to sell your property during the discount period following your purchase under the Right to Buy, you may be liable to repay some or all of your discount even if the sale date falls after the five-year period. Furthermore, if you make such an agreement prior to exercising your Right to Buy, you will be liable to repay all of the discount immediately upon completion of your purchase.
- Notice to complete: section 140 of the Housing Act 1985 is amended so that a landlord can now serve a notice to complete on a tenant who has failed to complete the Right to Buy purchase three months after the landlord has served a Section 125 Notice (Formal Offer of Sale).
