Social housing relief

Social housing relief can be withdrawn for any qualifying dwelling where a disqualifying event occurs up to seven years, from the commencement of development, (the “clawback period”) for development provided by local authorities, registered providers and registered social landlords and seven years, from the commencement of the first let, for rented properties provided by other landlords. Any relief which is withdrawn must be repaid by the beneficiary of relief.

The occupant of the dwelling will never pay clawback – liability falls on the owner of the land immediately prior to the dwelling being made available for occupation.

Where a disqualifying event occurs prior to the commencement of development, social housing relief will cease to apply.

A disqualifying event is any change to a qualifying dwelling causing it to no longer qualify for social housing relief. However the sale of a qualifying dwelling is not in itself a disqualifying event if the proceeds of sale are spent on another qualifying dwelling or the sale is the first sale of a dwelling provided at 70% of market value under Reg 49 7(B). Transferring the sale proceeds to the Secretary of State, a local housing authority, the Homes and Communities Agency or the Regulator of Social Housing are also not disqualifying events.

Where a disqualifying event occurs, the beneficiary of relief on the dwelling concerned must inform the council in writing within 14 days. Where this is not done, a surcharge equal to the lesser amount of 20 per cent of the chargeable amount or £2,500 may be applied. The notification must include the area of floor-space which is no longer eligible and a map locating its position within the development.

The council will calculate what clawback is payable, and notify the beneficiary in writing of the withdrawn amount and how this has been calculated. Alongside this, a new liability notice will be issued and a demand notice will be served to collect the clawed back relief. This will be done even if the development is complete.