Commentary on Sections Part 6 Section 185: Repayment of discount: periods and amounts applicable
427.At present, if a person who has exercised their Right to Buy wishes to resell the property within three years of acquiring it, he or she is required to repay to the former landlord all or some of the Right to Buy discount which they received. This section extends this period from three years to five years, in respect of both the Right to Buy and the Rent to Mortgage schemes (sections 143-151 of the 1985 Act).
428.Section 185 also makes three other separate changes. Firstly, it makes clear that former landlords have discretion as to whether or not to demand repayment of discount on early resale within the specified period in relation to purchases under both the Right to Buy and Rent to Mortgage schemes. This discretion is also available in relation to people who bought their properties before the coming into force of this section, and who are subject to a three-year discount repayment period that has not yet ended. Secondly, it changes the calculation of the amount of discount to be repaid from a flat-rate basis to a percentage basis, in relation to the Right to Buy only. Thirdly, it changes the repayment taper (i.e., the amount by which the level of discount which has to be repaid is reduced after each complete year since purchase) from one third per year to one fifth per year, in respect of both the Right to Buy and the Rent to Mortgage schemes.