Right to buy death before 5years

Gw1974

Hi, My father has recently passed away and purchased his council house 3years 9 months ago. The house has been left to myself and my brother and the mortgage is fully paid. My question is do we have to give the council 40% back? We are not planning on selling the house until after the 5 years but obviously ownership will change names. Many thanks

TBagpuss

Shelter seems to think not 
https://england.shelter.org.uk/professional_resources/legal/home_ownership/right_to_buy/repayment_of_right_to_buy_discounts 
But you would need to repay it if you then sold it within the next few years 

Norman_Castle

Sorry about your dad.

I'd suspect this is considered an exempt disposal. If any repayment was due it would be based on the date of sale as it is still owned by your late father as part of his estate until it is sold or transferred to a new owner.

RAS

Does the ownership have to change? Could it not be held by "the estate of GW's dad" until the estate sell it after the 5 years? Do also check the CGT situation.

Gw1974

So do we literally not do a thing with the house. Just sit on it for 16 months or so? Not sure if we get passed the 5 year mark and sell it we’d have to pay the 40%back then. What is CGT?

YoungBlueEyes

CGT = Capital Gains Tax

sammyjammy

Gw1974 said:

So do we literally not do a thing with the house. Just sit on it for 16 months or so? Not sure if we get passed the 5 year mark and sell it we’d have to pay the 40%back then. What is CGT?

Sorry for your loss.

 That's exactly what you do, just don't finalise the estate, 16 months isn't a terribly unusual amount of time for it to take anyway.  Are one of you going to live in it?

Norman_Castle

Gw1974 said:

So do we literally not do a thing with the house. Just sit on it for 16 months or so? Not sure if we get passed the 5 year mark and sell it we’d have to pay the 40%back then. What is CGT?

Why 40%? Any repayment would be based on when it is sold. 3 years and 9 months is only 3 months away from 4 years and 20%. Presumably his estate is going through probate, this can take a long time. Who are his executors? I'd start by asking the council if the sale of this property in these circumstances would be considered an exempt disposal.

https://www.ownyourhome.gov.uk/scheme/right-to-buy/contact-an-agent/

Gw1974

We presumed it would be 40% as it is approx 3 years 10 months since the purchase. Presumed that if he lived until May this year it would go to 20% and May next year is the 5 year mark. Myself and my brother are joint executors of my dads will and his house has been left equally between us. There are no other assets, bank accounts etc. We’ve not discussed what to do with the house yet, sell it, rent it out, my brother could move in and we could just leave it empty to get to the 5 year mark if needed. We’ve never been in any situation like this so don’t know what we’re doing really. I know I need to go to probate but do we need to do that immediately or can delaying help. You can tell I’m useless!

Norman_Castle

Gw1974 said:

We presumed it would be 40% as it is approx 3 years 10 months since the purchase. Presumed that if he lived until May this year it would go to 20% and May next year is the 5 year mark.

If a repayment is necessary it would be based on the date of subsequent sale, not the date he died.

You're not useless, its just a situation you've never had to deal with before. As you are the recipients of the will the only people to complain about slow progress is you. Both probate and selling a property can be a slow process which could easily take you over the 5 years.

Contact the council the property was bought from and explain the current situation. Ask if this is considered an exempt disposal, If it is you will not have to repay any of the discount regardless of when it is sold. Explain you are not ready to sell the property but you may at a future date. If you sell within 10 years of the original purchase date you may have to offer it to the council first. If they agree to buy it it will be for the full market price.

Regardless of what you choose to do with the property make sure you keep it insured.

This board could be useful to you. https://forums.moneysavingexpert.com/categories/deaths-funerals-probate

Jude57

First, my condolences on your loss. There's so much to sort out after a death that it can feel overwhelming but try to take it one step at a time.

When deciding what to do with the property there are some things to bear in mind and I'm sorry if the following sounds negative:

 If you decide to let the property to a tenant, be very careful that you understand all the legal requirements of being a landlord, so read the sticky at the top of this board for a start. Then bear in mind that there is no guarantee that the tenant will leave when you decide you're ready to sell, and you could be waiting for many months for a Court to order them to leave and/or evict them, with associated costs to you. All that is assuming the tenant has paid rent on time and not caused any damage. 

If you decide to leave the property unoccupied, remember that Council Tax will still be charged, although the Council may allow discounts (not all do, it's discretionary so see their website) the discount will be relatively short term and once that term expires, the Council may charge a multiple, say twice the occupied rate. Again, it's discretionary, so double check with the Council to make sure you understand what you are likely to be charged.

Finally, while leaving the property unoccupied is an option, make sure you have appropriate insurance. You will probably find that premiums for an unoccupied property are higher and you must inform the insurer that the property is unoccupied as standard household cover usually requires someone to be in residence.