Affordable Housing clawback

ladyjuicy08 · 07-01-2019 04:01PM #1

I bought my 2 bedroom apartment in 2010 under the affordable housing scheme in 2010 it was valued at €195000 I purchased it from council for €174000 I've seen similar apartment selling for €250000 in same area.How much is the clawback I would have to pay the council??

Irish-Lass · 07-01-2019 05:35PM

Were you not given a copy of documents when you closed showing the amount of clawback that would be expected after a certain number of years.

I know when I did them for SDCC that all new purchasers were issued with a copy of the documents.

You could just ring the Law Department of which County Council it is and ask them

ladyjuicy08 · 07-01-2019 10:04PM

Irish-Lass wrote: »

Were you not given a copy of documents when you closed showing the amount of clawback that would be expected after a certain number of years.

I know when I did them for SDCC that all new purchasers were issued with a copy of the documents.

You could just ring the Law Department of which County Council it is and ask them

Can't remember but I'll go thru my files and check

surrender monkey · 07-01-2019 11:03PM

The claw back will be huge here. You will pay over all the money you achieve over the original sale price to the Council. If you pay 175,000 originally and sell for 250,000 the claw back will be 75,000. Far better to stay on for another few years if you can. This is because the claw back percentage reduces incrementally after the 10th year until it is 0% after 20 years have passed.

Graham · 08-01-2019 12:36AM

Talk to the council and ask them.

I understand with some schemes that anything above the original value (€195k in your example) may only be subject to a % clawback on the amount over €195k.

*Small Print
Loose understanding, if memory serves me correctly, your mileage may vary, check with your local council and take proper qualified advice cos I might have this completely ar*eways.

ted1 · 08-01-2019 12:40AM

surrender monkey wrote: »

The claw back will be huge here. You will pay over all the money you achieve over the original sale price to the Council. If you pay 175,000 originally and sell for 250,000 the claw back will be 75,000. Far better to stay on for another few years if you can. This is because the claw back percentage reduces incrementally after the 10th year until it is 0% after 20 years have passed.

I don’t think that’s right, isn’t it percentage based. So if he got a house for 150 valued at 200 and sells for 300 he’ll get 300*.75=225.

surrender monkey · 08-01-2019 01:06AM

I don’t think that’s right, isn’t it percentage based. So if he got a house for 150 valued at 200 and sells for 300 he’ll get 300*.75=225.

Unfortunately not, a family member just had to pay the Council 38 grand for the privilege. Which was every penny achieved over the original purchase price. The property was sold at the start of year 9. If you wait a few years you won't pay as much. That said all councils are different, if you want to enquire as to the position in your council then the housing Loan Accounts section usually do the sums on the claw back so ring them.

Graham · 08-01-2019 01:14AM

Purchase price is not original valuation, it's the discounted price. I would guess your family member sold for less than the original valuation.

E.g.

Original value €200k
Purchased for €150k
Sold for €188k

€188 - €200 = -€12k so nothing left to split

surrender monkey · 08-01-2019 01:33AM

The family member sold for 38 k over the original purchase price in year 9. The council took every penny over the original purchase price. Trust me I'm not wrong. You have to wait until years 11 to 20 to start seeing a reduction. Sell in years 1 to 10 and they put the boot in.

Gumbo · 08-01-2019 09:41AM

ted1 wrote: »

I don’t think that’s right, isn’t it percentage based. So if he got a house for 150 valued at 200 and sells for 300 he’ll get 300*.75=225.

After the 10th year the clawback reduces by 10% per year until year 20.
My sister is currently selling her house and she has it since 2005.

There’s a calculation which to do using the original % discount.
Also, you can reduce the clawback by any upgrades you’ve done such as garden work, windows, extensions etc

So the following applies for example.
Original purchase price against the original market value = discount %.

Now the sale price is multiplied by the original % discount and that’s your clawback.
Then you minus any % for the years over 10 allowing 10% per year.

GIMP · 08-01-2019 10:14AM

Sold recently, DCC took every euro over the original price I paid. Less a 10% discount as I sold in year 11.

Way too much confusing over this.

I bought for 175k, sold for 185k they got 9k, 1k off (10% discount) for the 11th year.

ted1 · 08-01-2019 12:11PM

GIMP wrote: »

Sold recently, DCC took every euro over the original price I paid. Less a 10% discount as I sold in year 11.

Way too much confusing over this.

I bought for 175k, sold for 185k they got 9k, 1k off (10% discount) for the 11th year.

It’s not very confusing. If you bought for 175 I imagine that the house was worth more than 185. So in you case the affordable housing protected you from making a loss. So DCC made a loss. clawback comes into effective when you sell for higher than the I original house price and is percentage linked.
http://www.dublincity.ie/housing-and-community-i-own-my-home-section/i-bought-my-home-council

Graham · 08-01-2019 05:56PM

I think some posters are confusing the original purchase price with original value.

E.g. with a 10% Discount:

Original Purchase Price = €180,000
Original Valuation = €200,000

Seller gets nothing if the property is sold for less than €200,000.

vandriver · 08-01-2019 06:05PM

You pay the % discount on the sale price.
In your case,about 10.5%.
So if you sell for 250k,your clawback will be 26k

ladyjuicy08 · 08-01-2019 06:30PM

vandriver wrote: »

You pay the % discount on the sale price.
In your case,about 10.5%.
So if you sell for 250k,your clawback will be 26k

Sounds better than €75k

Lonestar75 · 31-01-2023 05:06PM

Hello,

Revisiting this thread as I am potentially selling my affordable house this year. Had originally contacted the local council last year. They confirmed the clawback rate was 26.02% and would go down by 10% per year after the first 10 years per year ( Year 10 26.02%, Year 11 23.42%, Year 3 21.07 etc. ) on the overall selling price. Then after 20 years there would be no clawback. This seems to match what I had originally understood the process to be and I was happy with it.

I purchased the property Jan 2009 at €199,750, with the market value being €270,000 at time of purchase. This provided the clawback rate 26.02%. I agreed with this, as the paperwork I signed (still have a copy notes the remainder (€70,250) was to be paid by the council. Fair enough!

Through a twist of fate old paperwork from my retired solicitor arrived recently and within their paperwork, it actually notes the council only paid €50,000 and not €70,250 as I had originally believed.

Is it not the case then that my original clawback rate should be less, after all that what I have on my original signed document as the contribution by the council and that was the market value as well, hence the calculation for the clawback rate? The council have confirmed the market rate was €270k and their contribution was €50k, not €70k

If anyone has a similar experience, appreciate any insight

Thanks

POKERKING · 03-12-2024 11:46AM

https://www.boards.ie/discussion/comment/120183004#Comment_120183004

How did this end up? Anyone coming to the end of their 20years?

tcs · 06-04-2025 08:02PM

Does anyone know what happens on the death of someone who purchased a 1-bed apartment AH in March 2007?

My sister had to move out in 2019 and started renting it out to tenants (12 years after purchase).

Affordable price: €175k

Market Value: €300k

Valued at €245k on date of death (Jan 2024) and I doubt that it would get much more now. Her minor daughter (toddler) is set to inherit it under laws of intestate. I am the personal legal representative (equivalent to executor- she had no will). We may not want to sell it if I can hack landladying as the trustee of the estate for 16+ more years! I had an informal conversation with someone in DCC who advised not to sell until 20 years is up but I actually don’t know what legalities might hit us.

Solicitor cannot get anything from land registry in terms of clause on deeds until we have letters of administration from the probate office but I have a copy of a land registry document from 2010 saying the following:

• The property is subject to the provisions of Section 9 of the Housing (Miscellaneous Provisions) Act, 2002 affecting the resale and occupation of the property herein for a period of twenty years from 12th March 2007.

• Contingent charge for such sums as may become payable under the terms of Instrument No. D2007DN099999A. (Instrument number changed!)

Solicitor seems to think that there might be something else when land registry shares something with her but I don’t think so. Other than mortgage going IIB /KBC → Bank of Ireland.

Is there any risk that they might look for the €70k difference between €175k affordable price and the €245k valuation from the estate / my niece’s inheritance?

billyhead · 06-04-2025 08:06PM

https://www.boards.ie/discussion/comment/123332766#Comment_123332766

Just out of interest are you allowed to rent out affordable property?

tcs · 06-04-2025 08:52PM

https://www.boards.ie/discussion/comment/123332776#Comment_123332776

With agreement.

I have seen others comment that the 10% deduction in clawback per annum wouldn’t apply if you sold between years 11 and 20 but if you held onto it for the 20 years, then all clawback lifts.

Found a record of an Irish Times article from 2011 that said

“Renting out an affordable home can be discussed as an option, but only if the finance to buy the property was advanced by a bank. Approval from the lender is required."

"Say an individual bought a house in 2007 which had an open market value of €300,000, for an “affordable” price of €200,000. The property would have to fall in value by more than €100,000 before they would find themselves underwater (assuming their mortgage was about €200,000). Why? Because the original discount will not be clawed back if the property is sold for less than the purchase price (ie, if you sell at a loss), with the result that it acts as a significant buffer against negative equity."

I guess it was in everyone’s interest to allow this after the bust as otherwise everyone loses…

The 2002 legislation for the older AH scheme is sketchy on detail and says sale is subject to terms and conditions of the housing authority so this means it may vary from one local authority to another.

Affordable Housing clawback

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