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How time as a tenant affects Right to Buy discount

You’ll only get a discount through Right to Buy if you’ve been a public sector tenant for at least five years. These five years don’t have to be continuous and could have been in different homes with different landlords.

If you are buying jointly with someone else, the discount is based on the person with the most years as a public sector tenant. So if you’ve got ten years as a tenant but your partner has 15, the discount will be based on 15 years.

You're a public sector tenant if you rent your home from the council or other public bodies like an NHS trust. If you aren’t sure whether your landlord is a public sector landlord, ask them.

Maximum discount levels for Right to Buy

There’s a limit to how much money you can get off the value of your property through Right to Buy. The maximum discount across England is £75,000.

How to work out your Right to Buy discount

There are different discount levels for houses and flats.

For houses you get a 35 per cent discount if you’ve been a public sector tenant for five years. This discount increases by 1 per cent for every extra year you’ve been a public sector tenant. No matter how long you’ve been a tenant, the most you can get off your home’s price is 60 per cent.

For flats you get a 50 per cent discount if you’ve been a public sector tenant for five years. This discount increases by 2 per cent for every extra year you’ve been a public sector tenant. No matter how long you’ve been a tenant, the most you can get off your flat’s price is 70 per cent.

For example, if you wanted to buy a flat worth £200,000 and had been a public sector tenant for ten years, you would qualify for a 60 per cent discount (£120,000). However, the maximum discount is £75,000. This means that if the flat was worth £200,000, you could buy it for £125,000.

How the ‘cost floor’ rule affects Right to Buy

Your discount may be reduced by the ‘cost floor’ rule. This rule protects your landlord from losing the money they have spent on repairs and looking after your home in the last 15 years. If they have spent more money than your home is worth, any discount will be reduced. You may not get a discount at all.

Paying back the Right to Buy discount when you sell

If you sell your Right to Buy home within five years of owning it, you’ll have to pay back any discount that you got. You’ll have to pay back:

• all of the discount in the first year
• 80 per cent of the discount in the second year
• 60 per cent of the discount in the third year
• 40 per cent of the discount in the fourth year
• 20 per cent of the discount in the fifth year

How much money you have to pay back depends on the value of your home when you sell it.

For example, your home may have been worth £100,000 and you got a 40 per cent discount (£40,000) when you bought it. If you then sold your home in the first year for £110,000, you would have to pay back 40 per cent of £110,000 (£44,000).

You may not have to pay back the discount if you transfer ownership of your home to a member of your family. You will need to agree this first with your landlord and then get a solicitor to do this for you.

If you can’t afford to pay back the discount, eg because the bank is selling your home, you should talk to your landlord. They may not ask you to pay back all of what you owe.

• Finding a solicitor or conveyancer

Right to Buy and third-party agreements

You'll also have to pay back the discount if you agree to transfer your property to a company, eg a private landlord, within five years. The amount you have to pay back will be worked out from the date you signed the transfer agreement. For example, if you enter into an agreement before you buy your flat, you will have to repay the full discount.

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