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're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Query re Right To Buy

Options
hello, I have a question I hope someone can help with. I purchased a house in 2003 under RTB scheme and received a discount at the time of 35% equating to 23,100.  I lived there for 3years and sold it and subsequently repaid 29,200 back to council as I had left before the 5 years. 
I am now in another council property after sadly a nasty divorce and have 9years of being a tenant and am hoping to buy this home under RTB scheme. The issue is no one seems to know what happens re the original discount I paid back in 2006.
The original council from 2003 say I cannot have another RTB discount but my new council think that, as I paid it back it is ok. Originally my present council had given me the figures for my current home and subtracted the 23,100 off it. Luckily I remembered that I had in fact repaid this discount plus more as the value had increased hence paying 29k back!
Anyone have any thoughts? I really would love to know if I am in fact eligible for this discount on my new house as the council don't know which worries me.....

Kindest wishes 


Comments

  • MovingForwards
    MovingForwards Posts: 17,148 Forumite
    10,000 Posts Seventh Anniversary Name Dropper Photogenic
    Mortgage started 2020, aiming to clear 31/12/2029.
  • Norman_Castle
    Norman_Castle Posts: 11,871 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 17 July 2020 at 11:03AM
    You can have a second rtb but the discount given on the first rtb is taken from the discount on the second. If the discount on the 2nd is 50k based on years etc but you received a £40k discount on the first rtb your discount will be 50-40=10k. Hope that makes sense.
    Your question is how is your previous discount measured as you paid an amount back. Try asking here, https://righttobuy.gov.uk/agent-service/

  • mollygrub
    mollygrub Posts: 125 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    Thanks both for info! So. If I paid back the original discount in its entirety as the value of the house had risen does that wipe it out for the potential 2nd RTB discount? 
    Originally I was advised I had to repay the whole 23100 despite having paid the increased amount of 29k??


  • Norman_Castle
    Norman_Castle Posts: 11,871 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 17 July 2020 at 8:38PM
    The discount and repayment will be a proportion of the value at the time of purchase and then sale. The 29k you repaid reflects the increase in the value of the property, it doesn't repay the initial discount.

    "Paying back your discount

    You’ll have to pay back some or all of the discount you got if you sell your Right to Buy home within 5 years of buying it.

    You’ll have to pay back all of the discount if you sell within the first year. After that, the total amount you pay back reduces to:

    • 80% of the discount in the second year
    • 60% of the discount in the third year
    • 40% of the discount in the fourth year
    • 20% of the discount in the fifth year

    The amount you pay back depends on the value of your home when you sell it.

    Example You bought your home worth £100,000 and got a 40% discount (£40,000). You then sold your home after 18 months for £120,000.

    40% of £120,000 is £48,000. As you’re in the second year, you would repay 80% of £48,000 (£38,400)."


    The question is, as you have paid back a percentage of the first rtb discount is that taken into account when the discount for the second rtb is adjusted to account for your first discount? Keep in mind, its always a percentage of the sale values and not a monetary amount. If you've repaid 60% of the discount (sale after third year) is that 60% disregarded for the second discount?

    This is my unqualified understanding, have you asked here? https://righttobuy.gov.uk/agent-service/


  • mollygrub
    mollygrub Posts: 125 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    I have asked the Rtb in your message and its still not clear even with their input!
  • Norman_Castle
    Norman_Castle Posts: 11,871 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 17 July 2020 at 9:45PM
    RTB-1 form. Page 8. Part D

    "Part D Previous discountNote:You may get a lower discount if you purchased through Right to Buy on another home (or a different government scheme). The amount of your previous discount, less any amount repaid, will be taken into account when determining the discount value for your current purchase."

    Council landlords and I would have expected the rtb advisers should have government guidance or notes explaining how to calculate the discount in your situation.


  • mollygrub
    mollygrub Posts: 125 Forumite
    Part of the Furniture 100 Posts Name Dropper Combo Breaker
    So grateful to you for taking the time to reply. Let's hope they can update me soon from the council as it makes potentially the difference between us purchasing or not.... 
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
  • 350.8K Banking & Borrowing
  • 253K Reduce Debt & Boost Income
  • 453.5K Spending & Discounts
  • 243.8K Work, Benefits & Business
  • 598.6K Mortgages, Homes & Bills
  • 176.8K Life & Family
  • 257K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only 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.