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Affordable Housing Clawback in 2015

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  • 25-08-2015 4:36pm
    #1
    Pac2015
    Closed Accounts Posts: 186 ✭✭


    I bought my apartment in 2009 via the Affordable Housing Scheme with SDCC I paid 127,500 for a one bed which was selling at the time for 215K I think, I have my mortgage with KBC direct and really had nothing else to do with the council after I got my keys in 2009.
    I plan on selling it next year and it has gone up in value so there would be a profit margin of about 10K or there abouts.

    Does anyone know the situation with the AH and the councils in 2015 as I know if it sold for less then market they said you dont owe them anything but if you sold it for a profit you have to pay them back the percentage which is fine but the section in SDCC for the AH which was called the property path is now gone and I am at a loss as what to do as in do I contact them myself at time of selling to let them know situation or not?


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    #2
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    I'd say ring the council and find out.

    Do you mean gone up from 215k to 225k or what's the 10k profit? Looks like you got a 40% reduction on market value and you would owe the local authority 90k of 225k.


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    #3
    Pac2015
    Closed Accounts Posts: 186 ✭✭Pac2015


    Michael D Not Higgins wrote: »
    I'd say ring the council and find out.

    Do you mean gone up from 215k to 225k or what's the 10k profit? Looks like you got a 40% reduction on market value and you would owe the local authority 90k of 225k.

    Sorry I wasn't clear at the moment I owe 116K on the apartment and they have gone up in value to around 120-135K I think you commented on another of my posts too.
    I think I will have to call the council but I know some other people in my building called and were just sent in circles as no one in the council knew the answer.


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    #4
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    Pac2015 wrote: »
    Sorry I wasn't clear at the moment I owe 116K on the apartment and they have gone up in value to around 120-135K I think you commented on another of my posts too.
    I think I will have to call the council but I know some other people in my building called and were just sent in circles as no one in the council knew the answer.

    Sorry, yeah I often comment without checking who it is. If the value is below the affordable price, i.e. 127,500 then there is no clawback. Otherwise it's 40% of the difference, e.g. if it sold for 128k then the clawback is 40% of 500 which is €200.


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    #5
    Pac2015
    Closed Accounts Posts: 186 ✭✭Pac2015


    Michael D Not Higgins wrote: »
    Sorry, yeah I often comment without checking who it is. If the value is below the affordable price, i.e. 127,500 then there is no clawback. Otherwise it's 40% of the difference, e.g. if it sold for 128k then the clawback is 40% of 500 which is €200.

    Is it not 40% of the difference left after sale ex...I owe 116K sells for 125K so its 40% of 9K


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    #6
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    Pac2015 wrote: »
    Is it not 40% of the difference left after sale ex...I owe 116K sells for 125K so its 40% of 9K

    No no, you bought at 127,500. That's the baseline. 116k is what you owe the bank and isn't factored into clawback. I made a mistake in my last post, it's not 40% of the 500, it's just the 500.

    https://www.housing.ie/Housing-Information/Home-Ownership/Living-in-an-Affordable-Home
    Check out Scenario 3.


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    #7
    Pac2015
    Closed Accounts Posts: 186 ✭✭Pac2015


    Going on scenario 3 my market value is 125K and it says the clawback is based on the lower end market value less what you paid so that would be a minus 2500K is that not correct?

    I have emailed SDCC to get a contact and to see where I stand.


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    #8
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    Pac2015 wrote: »
    Going on scenario 3 my market value is 125K and it says the clawback is based on the lower end market value less what you paid so that would be a minus 2500K is that not correct?

    I have emailed SDCC to get a contact and to see where I stand.

    Scenario 3 is if it sells above 127,500. Scenario 1 is what you're describing, where no clawback is required.


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    #9
    Pac2015
    Closed Accounts Posts: 186 ✭✭Pac2015


    Michael D Not Higgins wrote: »
    Scenario 3 is if it sells above 127,500. Scenario 1 is what you're describing, where no clawback is required.

    Okay I get you now so I dont have to pay back anything hopefully and can use what ever is made on it towards the deposit for the house I want to buy.
    Sorry its all so confusing.
    Thanks


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    #10
    12345abcde
    Registered Users Posts: 6 ✭12345abcde


    Hi sorry new poster but reading conflicting opinions as to what the council is due in clawback on sale.

    Here is my scenario.

    Purchase price €150k
    Valuation at time of purchase €300k
    % discount

    Now sale agreed at €175k

    Question is whether the council are owed €25k or €12.5k (€25k x 50%)


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    #11
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    12345abcde wrote: »
    Hi sorry new poster but reading conflicting opinions as to what the council is due in clawback on sale.

    Here is my scenario.

    Purchase price €150k
    Valuation at time of purchase €300k
    % discount

    Now sale agreed at €175k

    Question is whether the council are owed €25k or €12.5k (€25k x 50%)

    25k


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    #12
    12345abcde
    Registered Users Posts: 6 ✭12345abcde


    Michael D Not Higgins wrote: »
    25k

    Thank you but is this not different to the statute law regarding affordable housing?


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    #13
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    12345abcde wrote: »
    Thank you but is this not different to the statute law regarding affordable housing?

    What law? I'm going by the official guidance linked in the above.


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    #14
    Pac2015
    Closed Accounts Posts: 186 ✭✭Pac2015


    Its best to call the council I emailed them and got a contact as the girl said there are alot of changes so call them and see what they say.


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    #15
    Baron Floyd
    Registered Users Posts: 129 ✭✭Baron Floyd


    I'm just off the phone to DLRCC as I'm in the same boat currently, here is what I was told, as applicable to me and anyone else who bought from DLRCC (though I presume most CoCos are the same broadly speaking, barring the level of discounts applied)

    Your property was listed at 300k when you bought it, you paid 200k so you received a discount of 33.3% on the cost.

    If you sell for > 300k you will need to return 37.5% of the total sale price to the Council.
    If you sell for <=200k you owe no-one nothing…bar the bank.
    If you sell for >200k and <300k then you owe the Council 100% of the sale price minus 200k.


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    #16
    Dandelion6
    Registered Users Posts: 1,405 ✭✭✭Dandelion6


    Yeah that applies to everyone, if you sell for more than what you paid for it but less than "market value" at the time you bought it, all the profit goes to the Council. You don't get to keep any of the profit unless you sell for more than the original market value, and then the percentage calculation kicks in. If you sell for below what you paid for it you don't owe the council anything but what's left on your mortgage.


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    #17
    Pac2015
    Closed Accounts Posts: 186 ✭✭Pac2015


    Dandelion6 wrote: »
    Yeah that applies to everyone, if you sell for more than what you paid for it but less than "market value" at the time you bought it, all the profit goes to the Council. You don't get to keep any of the profit unless you sell for more than the original market value, and then the percentage calculation kicks in. If you sell for below what you paid for it you don't owe the council anything but what's left on your mortgage.

    Thanks this is fairly clear now I bought for 127,300 currently its valued I think around 125K and I owe 116K.


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