The Affordable Housing Schemes helped qualifying applicants, who would not have otherwise been in a position to purchase a home, to become home owners through purchase of designated affordable units. Houses sold to first time buyers under the various affordable housing schemes were priced at a significant discount from their market value. Buyers were free to sell their properties at anytime. However, in order to prevent short-term profit-taking on the resale of the house to the detriment of the objectives of the schemes, the schemes contained a clawback provision.
Under the clawback provisions, as set out in the Planning and Development Act 2000, as amended, and the Housing (Miscellaneous Provisions) Act 2002, as amended, where the purchaser proposes to sell the unit within 20 years of the date of purchase, he/she must refund to the local authority a percentage of the proceeds of the sale of the unit. The percentage of the proceeds to be repaid will be related to the proportion of discount from the market value originally received from the local authority. A full refund must be paid if the unit is sold within the first 10 years of occupancy. A reduction of 10% per annum is given for each full year of occupancy between 10 and 20 years and after 20 years of full occupancy no refund would be due to the local authority.
However, where a person is selling an affordable home and the clawback amount payable would reduce the proceeds of resale below the initial price actually paid, the legislation provides for the amount of the clawback payable to be reduced to the extent necessary to avoid that result.
I have no plans to amend these provisions, which I consider to be equitable and reasonable.
