How much discount will I get on my property?
The amount of discount you will receive on your property will be determined by a calculation set by the Government. The discount is worked out in an identical way to the statutory Right to Buy for council tenants. You can find out roughly how much discount you may get by using the discount calculator on the Right to Buy website https://righttobuy.gov.uk/right-to-buy-calculator/
- For each complete year of confirmed tenancy, you are entitled to receive a discount based on a percentage of the open market value of the property. The total periods of qualifying tenancy are added together (years, months, days) and the discount is calculated on the total years. The monetary value of this percentage is deducted from the market valuation of the property.
- For freehold sales (where you will own the property outright, including the land it’s built on) a tenant is awarded a 35% discount for the first five years and a further 1% for each additional complete year of confirmed tenancy, up to a maximum of a 70% discount – or £80,900, whichever is lower.
- For leasehold sales (where you will own the property and its land for the length of your lease agreement) a tenant is awarded a 50% discount for the first five years and a further 2% for each additional complete year of confirmed tenancy, up to a maximum of 70% – or £80,900, whichever is lower.
- The maximum discount will be reviewed annually and increased if appropriate in line with the Consumer Price Index level of inflation (CPI).
- If you have previously received funding under Right to Buy, Preserved Right to Buy or Right to Acquire, the discount will be reduced by that amount.
Example: Mrs Stevens has been a public sector and/or housing association tenant for 10 years. Her 2 bedroom house has been valued at £150,000.
Current house value: £150,000
Years as a tenant: 10 years
Eligible discount: (35% + 1% for each year over 5 years) = 40%
Discount value: £60,000
Amount Mrs Stevens will pay for house (£150,000 - £60,000) = £90,000