Tenants living in a house can get a discount of 35 per cent after five years of tenancy. For each extra year that they have been a tenant, they get another 1 per cent, up to a maximum of 60 per cent.
If they live in a flat, they can get a discount of 50 per cent after five years as a tenant. For each extra year that they have been a tenant, they get another 2 per cent, up to a maximum of 70 per cent.
But, whatever percentage eligible for, the discount cannot be greater than £75,000, unless the home is in London where the maximum discount is £100,000.
The qualifying period for discount can include time spent in different homes and with different landlords. This does not have to be continuous, so long as it was a public sector tenancy.
Candidates may also be able to count a period when a husband, wife or civil partner was a public sector tenant or lived in housing provided by the armed forces.
If the candidate lived with their parents after the age of 16 and later became the tenant of the same house or flat, they may be able to count that time too.
The amount of discount to be repaid if the Right to Buy borrower sell within five years of purchase will be a percentage of the resale value of the property, disregarding the value of any improvements.
For example, if the home was valued at £100,000 at the time they bought it from their landlord, and they received a discount of £20,000, the discount was 20 per cent.
If the home is valued at £150,000 when sold within the second year of purchase, they will have to repay £150,000 times 20 per cent discount times 4/5 i.e. £24,000.
Certain sales or transfers are exempt from the requirement to repay discount, for example, transfers between certain family members.
In addition, if they would face hardship by having to repay the discount, and their circumstances justify it, the landlord can decide not to ask them to pay some or all of what is owed.
If in advance of the purchase, or within the discount repayment period, they enter into an agreement to transfer the property to a third party in the future, then this will trigger repayment of the discount.
Discount repayment is triggered from the date that the agreement was entered into. So, for example, if they enter into such an agreement before they have bought the property or during the first year after buying, they will have to repay the full amount of discount received.
If the candidate has purchased under the Right to Buy scheme before, the amount of discount they get will usually be deducted from their discount when they buy again.
If the Right to Buy borrower wishes to resell or dispose of their home within 10 years, they have to offer it to either their former landlord or to another social landlord in the area at full market value.
The market value must be agreed between the parties or, if they are unable to agree, will be determined by the district valuer.
If the offer has not been accepted within eight weeks, the Right to Buy borrower is free to sell the property on the open market.
