PLEASE READ BEFORE POSTING

Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.

We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
We're aware that dates on the Forum are not currently showing correctly. Please bear with us while we get this fixed, and see Site feedback for updates.

Avoid triggering repayment of discount on right to buy house


My wife and I bought our right to buy home from the localauthority a year ago. Since then our family has grown such that we have 3children in a two bedroom house; our son is sharing a room with his twosisters. The house is now incredibly cramped and we really need to sell thehouse and try and buy a bigger property. Unfortunately, if we sell the propertywithin 5 years of purchase we will then be required to repay the discount tothe local authority. We needed this discount to purchase the property and willcertainly need it if we are ever to be able to move to a bigger property.

I wrote to the local council legal department to seek adviceon whether S160 (exempt properties) of the Housing Act 1985 could be used by usto avoid triggering repayment of the discount. The theory was that if my wifeand I transferred ownership of the property to just myself, this would be anexempt transfer under the Act and thus we would not have to repay any discount.The local authority response was that an exempt disposal would not attract therepayment of discount. However, they went on to say that that transfer ofownership that we proposed would be classed as an exempt disposal although anysubsequent sale of the property would be the first relevant disposal and wouldtherefore attract the repayment of discount. Therefore any sale before the endof the 5 year period would attract the repayment of discount.

I get the sense that there may be an angle via the exemptproperties clause and there may also be opportunities to avoid repayment of discountby funding a transfer via a loan rather a mortgage but do not know the detail.

Can anyone please give us any advice on how we can ‘structure’the sale of our house to avoid triggering the repayment of discount under theAct? Has anybody been down this route themselves and been successful or hasanyone advised their clients on such matters?

Thank you in advance for your assistance with this.
«1

Comments

  • ACG
    ACG Posts: 24,251 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Do you have a mortgage on the property? If so you might find the lender scuppers that idea - i have no idea whether your plan will work or not.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Have you not wondered why, if it was that easy to avoid repaying your discount, everyone else hasn't done exactly the same thing? We are talking about £MILLIONS here!!
  • notanewuser
    notanewuser Posts: 8,499 Forumite
    daddydgc wrote: »
    My wife and I bought our right to buy home from the localauthority a year ago. Since then our family has grown such that we have 3children in a two bedroom house; our son is sharing a room with his twosisters. The house is now incredibly cramped and we really need to sell thehouse and try and buy a bigger property. Unfortunately, if we sell the propertywithin 5 years of purchase we will then be required to repay the discount tothe local authority. We needed this discount to purchase the property and willcertainly need it if we are ever to be able to move to a bigger property.

    I wrote to the local council legal department to seek adviceon whether S160 (exempt properties) of the Housing Act 1985 could be used by usto avoid triggering repayment of the discount. The theory was that if my wifeand I transferred ownership of the property to just myself, this would be anexempt transfer under the Act and thus we would not have to repay any discount.The local authority response was that an exempt disposal would not attract therepayment of discount. However, they went on to say that that transfer ofownership that we proposed would be classed as an exempt disposal although anysubsequent sale of the property would be the first relevant disposal and wouldtherefore attract the repayment of discount. Therefore any sale before the endof the 5 year period would attract the repayment of discount.

    I get the sense that there may be an angle via the exemptproperties clause and there may also be opportunities to avoid repayment of discountby funding a transfer via a loan rather a mortgage but do not know the detail.

    Can anyone please give us any advice on how we can ‘structure’the sale of our house to avoid triggering the repayment of discount under theAct? Has anybody been down this route themselves and been successful or hasanyone advised their clients on such matters?

    Thank you in advance for your assistance with this.

    Cheap sofa bed/blow up mattress for you and the wife in the living room, split the kids between the 2 rooms. Wait 5 years, then sell.
    Trying to be a man is a waste of a woman
  • Thank you for your response on this and yes we do have a mortgage.

    Ideally we would like someone with extensive practical knowledge of the Housing Act to advise us on how we can 'sell' our house within the 5 year period without having to repay any discount.
  • chewmylegoff
    chewmylegoff Posts: 11,466 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    daddydgc wrote: »
    Thank you for your response on this and yes we do have a mortgage.

    Ideally we would like someone with extensive practical knowledge of the Housing Act to advise us on how we can 'sell' our house within the 5 year period without having to repay any discount.

    I smell a silly troll.

    If your request is genuine then go and see a solicitor. You cannot get reliable legal advice on complex issues for free on Internet forums. If you could then all solicitors would be out of a job.
  • notanewuser
    notanewuser Posts: 8,499 Forumite
    daddydgc wrote: »
    Thank you for your response on this and yes we do have a mortgage.

    Ideally we would like someone with extensive practical knowledge of the Housing Act to advise us on how we can 'sell' our house within the 5 year period without having to repay any discount.

    You're not going to find anybody with that kind of experience on a free forum, and a real expert will probably cost you more than the discount you're trying to scam. ;)
    Trying to be a man is a waste of a woman
  • It would be invaluable to us if a real expert could perhaps point us in the right direction or even recommend their services if they have a proven track record in this area.
  • notanewuser
    notanewuser Posts: 8,499 Forumite
    :wall::wall:
    Trying to be a man is a waste of a woman
  • LittleMax
    LittleMax Posts: 1,407 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    I smell a silly troll.

    If your request is genuine then go and see a solicitor. You cannot get reliable legal advice on complex issues for free on Internet forums. If you could then all solicitors would be out of a job.

    Indeed ... how much can a family grow in a year? There can have only been one additional child and they would still be in mum and dad's room.
  • If there are any solicitors that have helped their clients successfully avoid repaying the right to buy discount within the 5 year repayment period then please do get in touch...
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 348.4K Banking & Borrowing
  • 252.1K Reduce Debt & Boost Income
  • 452.4K Spending & Discounts
  • 241K Work, Benefits & Business
  • 617.3K Mortgages, Homes & Bills
  • 175.7K Life & Family
  • 254.2K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.