A tenant's guide- The Right to Buy

If you have bought your home under the Right to Buy you can sell it whenever you like. However, if you wish to sell within the 'discount repayment period' specified below you will usually have to repay the discount or a part of it.

If you sell within the first year of purchase, the whole discount will have to be repaid. Four fifths must be repaid if you sell in the second year, three fifths in the third year, two fifths in the fourth year and one fifth in the fifth year. After 5 years, you can sell without repaying any discount. In addition, the amount of the discount to be repaid if you sell within 5 years of purchase will be a percentage of the resale value of the property, disregarding the value of any improvements.

For example,

• If your home was valued at £100,000 at the time you bought it from the council, and you received a discount of £20,000, that means that your discount was 20%.
• If your home is valued at £150,000 when you wish to sell it, and you want to sell within the second year of purchase, you will have to repay £150,000 x 20% discount x 4/5 i.e. £24,000.

Certain sales or transfers are exempt from the requirement to repay discount, e.g. transfers between certain family members. In addition, if you would face severe hardship by having to repay the discount, and your circumstances justify it, the council has the discretion to decide that you may not have to pay back some or all of what you owe.

If in advance of your purchase or within the 'discount repayment period' you enter into an agreement to transfer your property to a third party at a future date, this will trigger repayment of your discount. Discount repayment is triggered from the date that you enter into the agreement. So, for example, if you enter into such an agreement before you have bought the property or during the first year after buying, you will have to repay the full amount of the discount you received.