You're confusing two different things here. One is to buy the council out and the other is to pay a clawback when you sell the property before a specific time.
To buy the council out, they will charge you the difference between what you paid and the original market value. The current market does not come into it.
The clawback you have to pay when you sell is different. Say the council originally paid 30% of the purchase price then the clawback would be set at 30%. If you sell before 10 years you would have to give 30% of the proceeds from the sale back to the council.
The bit where it gets interesting is when negative equity is involved. The legislation around AH states that the clawback will be all or partly waived if it would cause the seller to incurr a financial loss. This means that if you have to sell the property for less than the original valuation, you only lose if the sale price goes below the mortgage that you have taken out on it. Up to that point the council will absorb any negative equity.
To buy the council out, they will charge you the difference between what you paid and the original market value. The current market does not come into it.
Correct Howitzer. It is a also refered to as a "clawback" when you remortgage, however the way it is calulated is not the same as when you sell.I believe the clawback is also incurred when someone remortgages.
In that thread I thought the minister was basically proposing that people could remortgage without having to buy the council out (i.e. it would remain an affordable house). I don't think a loophole exists here, but am open to debate it if anyone can find supporting documentation to say otherwise.Maybe this is one of the reasons for this.
http://www.askaboutmoney.com/showthread.php?t=79994
Looks a legitimate loophole to me.
[broken link removed]Where are you getting this information from?
This reads to me, "if you got a discount of X, then to remortgage you will have to payback X". Anyone else have any other documentation that says otherwise?You can remortgage your property, but once you decide to re-mortgage the clawback or discount you received at the time of purchase will have to be paid to Dublin City Council
The Housing (Miscellaneous Provisions) Act 2004Where does it say that there is a different rule for when it goes down?
"This reads to me, "if you got a discount of X, then to remortgage you will have to payback X". Anyone else have any other documentation that says otherwise?"
I would have taken this to mean X% discount off market value on purchase means X% discount off market value on disposal or on any other even that triggers clawback.
Eh? Where exactly does it say that when you remortgage it is calculated that way?[broken link removed]
Have a look at page 8, its based on the % discount.
Sorry, it looks like we both may have misunderstood each other. I wasn't sure myself if you were taking the mickey with the previous link you provided.Eh, this is an open discussion, no need for the smartass tone of your posts thank you very much. Apologies if I misunderstood you,
I'm not sure of the exact steps that would be taken if you illegally rented out the property, but I don't think it's as easy to get the clawback removed as you suggest. There may even be penalties if you were to do as you suggested but I'm no expert in the area, so you'd need to check it yourself.as opposed to buying the council out which is not something I am familiar with, would it not make sense to break the terms of affordable housing e.g. rent out the whol apartment for a period, which would trigger clawback which IS based on the % discount initially received?!
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