According to The comprehensive guide to inheritance when someone inherits a sizeable sum of money they must consider the immediate expenses to be borne as a result of the inheritance. These include the deceased’s debts, funeral costs, mortgage payments and the likes of these. If the inheritance is in the form of a property or estate, heirs will need to assess their value to ascertain whether they are liable to inheritance tax or not. The tax-free band for 2021/22 stands at £ 325,000. This means that if your inheritance is worth less than this amount, you are not liable for inheritance tax.  

Can I Buy My Council House With My Inheritance?

Yes, you can buy your council house with your inheritance. There are different options to make the purchase that you can choose from; based upon your finances as well as current tenancy circumstances. 

Under the Right to Buy scheme council houses can be purchased by local council tenants but there are certain basic conditions to be met. These include the following:

  • The council house is the applicant’s main home
  • The property is self-contained
  • The applicant is a secure tenant
  • The applicant has had a public sector landlord for at least five years

There is also an option of buying your council house under a joint application. In this case, it is essential for the applicant to either file their council house application with someone as their joint owner and be willing to share their responsibilities as a house owner or have up to three family members (who have lived with them for at least 12 months) willing to share ownership rights.

Under “Preserved Right To Buy” you can purchase a council house that you lived in but the council sold it to a housing association landlord.

In case, you are a housing association tenant, you can apply for the purchase of your council house by filling the  Right to Acquire Application Form To be eligible, your must spend at least three years as a council house tenant and fulfil all the eligibility criteria that apply to local council tenants. However, you should not apply under the Right To Buy or Preserved Right To Buy schemes.

Voluntary Right To Buy allows you to purchase a council house that you may not have lived in.

To Find out if you’re eligible for Right to Buy – Own Your Home contact your local council.

To learn more about the topic, we will explore the following areas:

  • What Is The Right To Buy Scheme?
  • How Can I Apply For Right To Buy?
  • Can I Get A Discount On Purchasing A Council House?
  • Can Council Houses Be Passed Down?
  • Can I Keep My Council House If I Inherit A House?

What Is The Right To Buy Scheme?

The Right To Buy scheme was originally introduced in the UK around 40 years ago with the aim to provide discounts to council housing tenants who wish to purchase the property that they have lived in for a certain number of years. Although the scheme is now abolished in Wales and Scotland, council housing tenants in Northern Ireland and England continue to benefit from it as long as they can prove the following to confirm eligibility:

  • they are currently living in the council home and it is their main residence
  • none of the rooms is being shared with anyone else other than household members
  • the applicant is under a secure tenancy agreement with their council housing landlord
  • the applicant has been a council housing tenant for a minimum of three years
  • there are no pending debt disputes against the applicant

Joint tenants are also required to fulfil the above criteria if they wish to apply for council house purchase under this scheme. In fact, applicants can apply with up to three family members who have lived with them for up to 12 months.

How Can I Apply For Right To Buy?

Under the Right To Buy (RTB) scheme you will be required to follow the below steps in order to purchase your council house:

  • Fill an online RTB application form by providing the desired information.
  • Save a copy of the online form, print it and send it to your landlord.
  • Wait for your landlord’s response. (This may take anywhere between 4 to 8 weeks).

Your landlord may either choose to refuse by stating their reasons; which you can choose to appeal to should you not agree with the decision.

In case of their agreement to sell, the landlord’s response will include their offer as well as the following:

  • their asking price for the property
  • the amount of discount that they are willing to offer
  • a detailed description of the property along with any land that is part of it 
  • details of any structural problems with the property or any service charges due

Can I Get A Discount On Purchasing A Council House?

Yes, if you are eligible for the Right To Buy scheme you will get a discount on purchasing a council house to a  maximum limit of £84,000 across England (except for certain boroughs in London where it is £112,800). The amount keeps increasing with the rise in the rate of inflation every year.

The discount that you may avail on purchasing a council house is primarily is based on the following factors:

  • The number of years that you’ve been a council housing tenant
  • Whether you intend to purchase a flat or a house
  • The monetary value of the property you intend to purchase

In the case of purchasing a council house, you may be able to get a 35 per cent discount; while in the case of a flat, it will be 50 per cent if you’ve lived in a council housing facility for between three to five years.

However, if you have applied under the Right To Aquire scheme, you will be able to get a discount of around £9,000 to £16,000 on the price of your property; depending upon where you live in the UK. This discount may reduce if you have previously applied for under a Right To Buy or Right To Acquire scheme.

The Right to Buy calculator can help you learn more about the discounts you are eligible for.

Can Council Houses Be Passed Down?

Yes, council houses can be passed down but this can only be applied once per the tenancy agreement. For instance, if the tenancy has passed down from one person to another, the successor will not be able to pass it down again. The only exception to this rule may be the permission for “second succession” or “discretionary succession” granted by local council authorities in their council tenancy agreement with renters.

In addition to this, the type of tenancy also plays an important role in deciding on the succession of a renter. Let’s analyse the different situations that apply in the case of succession of tenancy:

  • The succession of a council house in case of joint tenancy: A joint succession agreement includes two (or more) tenants as the renters who share the responsibility of maintaining responsibilities towards the property. In this case, if one tenant dies, the tenancy is automatically passed on to the surviving tenant. However, it is essential for the successor to maintain the council property as their main residence.
  • The succession of a council house in case of sole tenancy: In most cases, council house tenancy can be passed down to the surviving partner/spouse/civil or unmarried partner of a deceased tenant through “succession rights”. However, it is essential for the partner to be living in the council house at the time of the demise of their partner in whose name the tenancy agreement is. In some cases, it may also be passed down to close family members if the deceased is your parent or grandparent, aunt or uncle, brother or sister, child, grandchild, niece or nephew.

As a general rule, in the case of succession rights, the rights of surviving partners override those of close family members.

Can I Keep My Council House If I Inherit A House?

There are chances that you may not be able to keep your council house if you inherit a property. The reason for this is that the eligibility criteria for council housing include a means test. Therefore, individuals facing financial hardship qualify for council housing while those who may be financially stable enough to own a private property may not.

There have been instances in which individuals have deliberately concealed their private property or inheritance from council authorities in order to maintain council housing residency as well as state benefits that they were claiming. However, once councils find out about intentional attempts to hide factual details about one’s financial (or even personal/circumstantial) situations, tenants may bay be evicted from council housing property or even fined a hefty amount.

Conclusion:

While there are many options available on how to spend your inheritance money, like paying off debts or helping a sibling in need or even going on a holiday; however, one of the most practical and long term uses of a lump sum amount is to either invest it or purchase the property. Buying your council house with your inheritance money may be one of the best long term investments that you can make. However, it is essential to be able to fulfil the eligibility criteria that are set by local authorities.

FAQs: Can I Buy My Council House With My Inheritance?

Will inheritance affect my council tenancy?

Yes, depending on the size of the inheritance, there may be an impact on your eligibility for council housing which is intended for individuals who are unable to afford privately rented out the property. Additionally, you may lose a claim on your benefits in certain cases.

Can my son buy my council house for me?

Yes, your son or any other family member can buy your council house for you. However, it is essential that either they have their name on the tenancy agreement or have lived in the property with you for at least 12 months.

Can you buy a council house with cash?

Yes, you can buy your council house for cash. This may either be from your income, savings, inheritance or even benefits.

Can a council house be passed down?

Yes, council houses can be passed down but this can only be applied once per the tenancy agreement. For instance, if the tenancy has passed down from one person to another, the successor will not be able to pass it down again. The only exception to this rule may be the permission for “second succession” or “discretionary succession” granted by local council authorities in their council tenancy agreement with renters.

What do you do when you inherit a house UK?

When someone inherits a house, they are usually faced with the options of either moving into it, selling it or renting it out. They will need to consider their personal financial circumstances as well as monthly income and savings. Owning a house includes payments of taxes as well as a host of maintenance costs. If the house that they inherit falls in a higher council tax band, the residents will also have to bear added expenses as a result.

References:

Buying Council Flat: Right To Buy – HomeOwners Alliance

Right To Buy Mortgage Scheme

Council housing: Buy your council home – GOV.UK

Right to Buy: buying your council home – GOV.UK

Right to Acquire: buying your housing association home – GOV.UK

How house buyers can get a £110,000 discount by buying their home off the council – Mirror Online

The comprehensive guide to inheritance tax | moneyfacts.co.uk

Find out if you’re eligible for Right to Buy – Own Your Home

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