Can you transfer a right to buy to a family member?
The simple answer is no and the harder answer is yes. No, you can’t typically transfer a right to buy to your family member as your right to buy property was given to you and you were made eligible for the right to buy scheme by your local council and your family member likely wasn’t.
Yes, you can transfer your right to buy to a family member if your landlord agrees but your landlord may insist on your family member being eligible if not you may have to pay back any discounts which you received.
The rules for the right-to-buy scheme are engineered to stop people from using it to make a quick profit:
Here are some considerations if you want to transfer a right to buy to your family member:
Paying back your right to buy discount
One of the rules of the right-to-buy scheme is that you cannot sell your right to buy within 5 years of buying it if not you will have to pay back the discount you received. The total amount of discount you may have to pay back will depend on the value of your house as valued by the landlord or your district valuer.
You’ll have to pay back all of the discounts if you sell within the first year. After that, the total amount you pay back reduces to:
- 80% of the discount in the second year
- 60% of the discount in the third year
- 40% of the discount in the fourth year
- 20% of the discount in the fifth year
You may not have to pay any discount if you transfer your right to buy to your family member after getting permission from your landlord. It is likely your landlord will insist that your family member is eligible for the right-to-buy scheme. You should seek independent legal advice when looking to transfer your right to buy to your family member.
Applying for a right to buy with your family member
You won’t necessarily need to transfer a right to buy to your family member. If your family member has lived with you for the past 12 months prior to you trying to purchase your right to buy property you could list their names as one of the eligible parties and they will have their name on the deed of the property too. You can also apply for a right to buy with three other eligible family members or other applicants.
Your landlord’s first refusal
If you sell your right to buy property within 10 years of buying it your landlord and any other social landlord in the area will have first refusal rights. This means you must first offer your right to buy property to your landlord or any other social landlord in the area.
They will wait 8 weeks to respond to your offer after which you can sell the property on the open market.
If your landlord responds within 8 weeks and wants to buy your property they will have to buy the property at the agreed full market price of the property.
If you dispute the landlord’s valuation you can get the district valuer to value your property at no cost.
If you do transfer a right to buy property to your family member you may still want to consider the below points:
If the right to buy home is transferred to your family member they may be eligible for inheritance tax if you don’t live beyond 7 years.
If you transfer your right to buy to a family member and years later you need to be taken into a care home and looked after the department of works and pensions may confiscate your previous asset as they may see the house transfer as a deprivation of assets or capital.
You can read more about the right to buy here
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.