NB:-Shocking discovery on clawback concept during sale of A/H Apartment

[zen]

Well actually what you were saying is don't look for more cause it won't go in ur pocket. The property could well be worth more than what you paid for it but you are advising people not to bother accepting higher offers. So yes you are looking to screw the taxpayer

You are forgetting that you got it at a discount in the first place

Suebee...... That obtuse post alone has my suspicions confirmed and doesn't warrant any intellectual or pragmatic reply.

For anyone selling an AH unit, you now know how the confiscation and clawback works. I'm blown away by peoples response here as I'm actually going through this and am being told otherwise by what can only be trolls.

 

[Sarenco]

Hi Zen

Have you ever heard the phrase "don't look a gift horse in the mouth"?

You seem to have somehow managed to convince yourself that you are being shafted in some way. You're really not - you got a fantastic deal.

The fact that you cannot see that is your problem.

 

[zen]

Hi Zen

Have you ever heard the phrase "don't look a gift horse in the mouth"?

You seem to have somehow managed to convince yourself that you are being shafted in some way. You're really not - you got a fantastic deal.

The fact that you cannot see that is your problem.

Hello Sarenco

I refuse to digress.

This thread was is SPECIFICALLY about how the clawback REALLY works (in combination with confiscation)

For what its worth, if there is anyone else out there who doesn't quite understand the "clawback", they do now.

Have YOU ever heard the phrase "No good deed goes unpunished"?

 

[Sarenco]

Hi Zen

Was there any confusion about how the clawback was going work? I wouldn't have thought so.

I assume you agree that the AH scheme was a fantastic deal?

 

[vandriver]

Van Driver you haven't understood the post, if your not a troll then please read the post again as you CLEARLY dont understand the clawback. Thats not how it works.

I'm in the process of selling, I'm going through the clawback process, I'm explaining EXACTLY HOW IT WORKS and its NOT how we were told.

Please keep to the thread topic, this is about understanding the clawback concept, not being out of pocket.

I 100% understand the clawback process.I explained it clearly,and pointed out that you were getting a break by only paying the excess above your purchase price(if below the market value at time of purchase),not the discount percentage on your sale price.
To put this in figures:
You agreed to pay 28% of your sale proceeds back to the CC.
This is €47k.
You are only being asked for €20k.
There is no confiscation.
There is a break for your good self of €27k.
€27k that you agreed to pay.

If any of the above is not accurate,please point it out.
You always have the option of living in the property for the full 20 years,and will have no clawback.
And finally,the easiest thing on the internet is to label someone you don't agree with as a troll.
Show anywhere ,in any post ,that anyone has posted about your 'problem' where there is any factual inaccuracy.
The fact is,what you thought,and what you actually signed are two different things.

 

[zen]

Hi Sarenco

Yes, the reason for the thread was because there was confusion and I was sharing my experience of how it actually worked. In fact this is one of a plethora of misinformation we had been given about the AH scheme.

If you read any of my other posts on other threads you'd understand my sentiments on the scheme. People were mislead, be it deliberately or via negligence. I would have never agreed to it had I understood it the way I do now.

I'm now in year 12 still learning and feeling the consequences of what was agreed. This specific thread is just another one added to the list.

I'm sure some people are happy with the scheme if they stay put, their home meets their needs, the never lost their job, they never outgrew it and most importantly, never ever had to engage directly with DCC for assistance. And we are not even mentioning negative equity.

For what its worth, I never entered this scheme with the intention of making money. I'm not an investor, just a regular Irish man looking for a home, not an investment, so I can raise a family and work like everyone else. That's the honest truth.

 

[Sarenco]

Can you explain exactly how you were misled?

The terms of the arrangement were described at the outset in very straightforward terms - was there something you didn't understand?

Again, you seem to think you are getting a raw deal but any reasonable person would think you are actually getting a fantastic deal given the way things turned out. Why you can't see that is anybody's guess.

 

[zen]

Vandriver thanks for the reply

I 100% understand the clawback process.I explained it clearly,and pointed out that you were getting a break by only paying the excess above your purchase price(if below the market value at time of purchase),not the discount percentage on your sale price. NO, your wrong! Thats what I'm trying to tell you, thats what I thought too!!!!
To put this in figures:
You agreed to pay 28% of your sale proceeds back to the CC. NO, it was understood that 28% above what you paid was liable, and this contradicts what you wrote above (highlighted in purple)
This is €47k.
You are only being asked for €20k.
There is no confiscation.YES THERE IS......This is the point of my thread!
There is a break for your good self of €27k.
€27k that you agreed to pay.


If any of the above is not accurate,please point it out.done
You always have the option of living in the property for the full 20 years,and will have no clawback.UNDERSTOOD THAT
And finally,the easiest thing on the internet is to label someone you don't agree with as a troll. There has been no constructive criticism, or even need for criticism as I was telling people how it works as I'm doing it, RIGHT NOW. For some bizarre reason people are misunderstanding the thread thinking I'm trying to rig the system for a quick buck.
Show anywhere ,in any post ,that anyone has posted about your 'problem' where there is any factual inaccuracy.
The fact is,what you thought,and what you actually signed are two different things.

Vandriver
For the last time....... with all due respect, I'm going through this!! I got the redemption and clawback figures for the sale! Your understanding is wrong! Seriously, I'm not joking, there is a confiscation of anything above your purchase price. Anything above the ORIGINAL MARKET PRICE is liable for the clawback of 28%.

Trust me, the council have made well sure you will NEVER make any money other than any equity you have built up.

 

[zen]

Can you explain exactly how you were misled?

The terms of the arrangement were described at the outset in very straightforward terms - was there something you didn't understand?

Again, you seem to think you are getting a raw deal but any reasonable person would think you are actually getting a fantastic deal given the way things turned out. Why you can't see that is anybody's guess.

Sarenco, did you get a comprehensive welcome pack on the scheme? I didn't. If the terms were laid out in straightforward terms, this means I'm an imbecile and cannot read. Do you work for the council?

Pick a thread in this forum,,,,.... there's loads of them, full of people who didn't and still don't understand this scheme, are they also imbeciles? Look at all the lost souls on this forum who haven't a dickybird about how this works. Look at brendans attempt to help people with his key post, read that and come back to me. Its about "shared ownership" and that's not even what the scheme is called.

At this point, its regardless if I was mislead or not. The point of my thread was to show the "isness" of the clawback,

I believe that I've done that now................ in very straight forward terms.

 

[trasneoir]

If this was sold to you under false pretenses, that's a totally legitimate grievance, and if it's still being miss-sold then this could be a really useful thread.

That said, if I've understood the numbers right, I'd stop way short of calling it a scam. Check my homework please?

Original value: 200k
Original price: 150k

If you sell for 140k, you pay 150k
If you sell for 150k, you pay 150k
If you sell for 170k, you pay 170k
If you sell for 200k, you pay 200k
If you sell for 210k, you pay 202.5k

So even if I don't stay in the property long enough to "earn" the discount, the council will eat 100% of any losses(up to 50k), but only 25% of any profit?
That seems more than fair. I'd take that deal all day every day.




Yes, there's a flaw - the owners/occupants should have an incentive to get the best possible price for themselves and the council. 2 alternatives:
10% "bonus" for recouping some of the council's money:
If you sell for 140k, you pay 150k
If you sell for 150k, you pay 150k
If you sell for 170k, you pay 168k
If you sell for 200k, you pay 195k
If you sell for 210k, you pay 197.5k

10% "contribution" to the council's shortfall
If you sell for 140k, you pay 150k
If you sell for 150k, you pay 155k
If you sell for 170k, you pay 173k
If you sell for 200k, you pay 200k
If you sell for 210k, you pay 202.5k

I know which alternative I'd prefer as a taxpayer, but either is preferable to the seller "gifting" up to 50k of public money to the new buyer.

 

[Sophrosyne]

This link from Dublin City Council shows that the clawback was the sale proceeds @ the discount received.

In your case that would have been €170,000 @ 25% = €42,500.

Your mistake is in supposing that the clawback only applied to the difference between the sale proceeds and the price you paid.

 

[zen]

Thanks transeoir, comments in blue

If this was sold to you under false pretenses, that's a totally legitimate grievance, and if it's still being miss-sold then this could be a really useful thread. Thank You

That said, if I've understood the numbers right, I'd stop way short of calling it a scam. It's a matter of opinion based on experience. Why was positive equity taken into account and not negative equity? People are spoken to as if they were well informed, they weren't, I've a list as long as my arm of the shenanigans I've been put through Check my homework please?

Original value: 200k
Original price: 150k

It all depends on how much is LEFT ON THE LOAN, bear that in mind (your equity, if any, you keep)and but dont forget all the years of paying your mortgage....Anything between 150-200k is confiscated, anything above 200 is subjected to the clawback (less any >10 year discount)

If you sell for 140k, you pay 150k NegEeq, Yes, if you have 10k lying around, if not it will be a burden (with interest) until you pay it.
If you sell for 150k, you pay 150k Yes, but only if you owe exactly 150
If you sell for 170k, you pay 170k Yes, but only if you owe exactly 170 (because of arrears maybe),
If you sell for 200k, you pay 200k Yes, but only if you owe exactly 200 (because of arrears)
If you sell for 210k, you pay 202.5k Yes, this is both the confiscation and clawback in action.

So even if I don't stay in the property long enough to "earn" the discount, the council will eat 100% of any losses(up to 50k), but only 25% of any profit?
That seems more than fair. I'd take that deal all day every day. Its not about being fair, its about understanding the clawback.




Yes, there's a flaw - the owners/occupants should have an incentive to get the best possible price for themselves and the council. 2 alternatives:
10% "bonus" for recouping some of the council's money:
Exactly, it 100% Naturally DISINCENTIVES ANYONE to sell above what they paid. The recoup is minuscule compared to their gain and the hassle of negotiating. Its not a case of biting your nose off to spite your face, it's pragmatic common sense! If your looking to get out and start at the bottom again (they like to use the word fresh, it's the bottom)
If you sell for 140k, you pay 150k
If you sell for 150k, you pay 150k
If you sell for 170k, you pay 168k
If you sell for 200k, you pay 195k
If you sell for 210k, you pay 197.5k

10% "contribution" to the council's shortfall
If you sell for 140k, you pay 150k
If you sell for 150k, you pay 155k
If you sell for 170k, you pay 173k
If you sell for 200k, you pay 200k
If you sell for 210k, you pay 202.5k

I know which alternative I'd prefer as a taxpayer, but either is preferable to the seller "gifting" up to 50k of public money to the new buyer.
If your a seller (after going through that recession) and you know you can sell at the price your got it for, and walk away with a clean slate, why, in the name of all that is sanity would you haggle for something your never going to get and make the sale harder and make money for an institution that mislead you? Whats fascinating about these responses is that THE COUNCIL ARE GETTING EVERY PENNY, 10 YEARS BEFORE THE TERM! Its win win for them. What gets my goat is people talk about the tax payer as if we have any feedback on how its spent or if we are consulted in any shape or form.

 

[zen]

This link from Dublin City Council shows that the clawback was the sale proceeds @ the discount received.

In your case that would have been €170,000 @ 25% = €42,500.

Your mistake is in supposing that the clawback only applied to the difference between the sale proceeds and the price you paid.

Fair play Sophrosyne. You get it!

Where did you get that???!!!!

While this document is from the council, I've never seen it at the time of signing (but other posters are telling me I did....). That website is not from Dublin City Council, its someone call http://www.seankenny.ie/news/docs/AffordableBooklet0411.html

It wasn't my mistake with all due respect. My complaint is that we were misinformed, be it deliberately or via negligence. As mentioned, this is only one of a multitude of disinformation Id received. Now that I know, I'm sharing the knowledge for anyone who appreciates it.

A strong man stands up for himself, a stronger man stands up for others. Remaining silent and not sharing what I've learned would have been complicit in the Affordable Housing shenanigans.

 

[trasneoir]

I think that most of the disagreement here is down to a difference in perspective. You're coming from the "consumer" perspective, and you've obviously had a miserable time. Having dealt with the public service on simple matters, I can only imagine how maddening it must be to work through something as complex as this. The rest of us are looking at it from a distance, after the fact, and all we can see is that the numbers look pretty sweet.

If your looking to get out and start at the bottom again (they like to use the word fresh, it's the bottom)

A different perspective: €0 property equity isn't "the bottom", there are plenty of people with significantly less. Including (i presume) people who bought identical apartments at fair market value. This scheme has shielded you from that position.

THE COUNCIL ARE GETTING EVERY PENNY, 10 YEARS BEFORE THE TERM! Its win win for them.

I don't see it that way. The council sold a 200k property for 150k plus 50k worth of public good - the property will house a needful family for 20 years.
If the buyer doesn't deliver on the 50k worth of public good, then it seems fair enough that they'd want to collect the shortfall in cash.

I'm sure you'd agree that it would be outrageous if somebody were allowed to buy an AH property with a 50k subsidy and flip it the next day for 50k "profit".

What gets my goat is people talk about the tax payer as if we have any feedback on how its spent or if we are consulted in any shape or form.

I'd say that when you open a conversation with "this public policy is good/bad/whatever", then the policy's cost to the exchequer has to be a part of the equation. Because the public purse is so big, abstract and diffuse, it's tempting to think of it as monopoly money. Thinking of it in terms of "MY TAXES" tends to focus the mind on value for money.

 

[vandriver]

Your quote
'Trust me, the council have made well sure you will NEVER make any money other than any equity you have built up.'
Is palpably and demonstratively untrue.
Anyone with a basic grasp of arithmetic could see that.
But,for those that don't have the maths,here's a worked example:
Home value 200k
Purchase price 150k
Discount 25%

Sell for 400k
Clawback 100k
Profit 300-150= 150k

Sell for 300k
Clawback 75k
Profit 75k

Sell for up to 200k
No profit.

The above examples assume less than 10 years occupancy,as obviously the profit goes up every year after 10 as the clawback decreases .

However,if you'd just plain bought the home ,and were now selling for 170 k,you would have lost 30 k .You have been shielded from this.

 

[Brendan Burgess]

The problem is that when you bought this €200k property for €150k, neither you nor Dublin City Council, considered what would happen if house prices fell before you sold it.

The following example is not a very clear example:


It just assumes that house prices will rise.

It would have been better if they gave this example

I would have never agreed to it had I understood it the way I do now.

So if they reintroduced the scheme today and offered you a €400k house for €300k, you would not agree to it? You would prefer to pay €400k for the house instead?

 

[Bronte]

Finally, a genuine question but I'm not sure the adjective "excellent" is sarcasm.

The responses to my thread reads like some of you are in the same room.....

My solicitors advice is....

If you bought your property for 150k and are offered 150k, just take it. Don't waste your time trying to negotiate above that figure as anything above that figure will be confiscated as I've been trying to explain.

The thread is not about being out of pocket, that's a different story and the entire forum is littered with people out of pocket, it doesn't need any more, just like it doesn't need any cheerleaders of the scheme telling people they got a good deal when they clearly didn't.

Yes I was being a tad sarcastic, but I'm very happy to see your do indeed have a good solicitor. You made a mistake and you're not prepared to admit it. You didn't understand the scheme. Your solicitor does, the corporation does and posters on here do too. There was no scam. And you really really went overboard in your original post which is why you're getting this reaction.

Just for your information us posters on here are not in the same room, but many of us have been on here a long time and have some experience of varying degrees in financial matters.

 

[Bronte]

???
No, sell for the price you PAID FOR IT. Can you people read? Not BELOW the price, for the love of god! IF one sells for the said amount 170k, the council/taxpayer/MMEEEEE get the full amount BACK,,,,.....ON TOP of the 10 years of mortgage and mortgage insurance payments .......wait for it 10/15 years before the mortgage term!

This has to be a joke these replies!

I have one property still in NE (but getting there ) That's on top of the more than 10 years of mortgage and mortgage insurance and repairs and tenants. If I sold it in the morning I'd have to pay the NE, not you and not the taxpayer. Unlike in your situation the taxpayear/council are losing out. You are not losign out.

You're making the classical mistake of looking at your 'wasted' mortgage repayments. This I suspect is at the root of your misunderstanding. You got housed, you had your own home, you were able unlike others to get a subsidised house. You have not been scammed.

By the way why are you selling it? Why not just stay put?

 

[cremeegg]

If the terms were laid out in straightforward terms, this means I'm an imbecile and cannot read.

Well as you still do not seem to understand the mechanism of the scheme as clearly explained by Vandriver, that has to be a possibility.

Reviewing the totality of your posts on this thread, I suspect anger rather than imbecility is your real stumbling block to understanding.

On a different point, well done on the coloured fonts. They are available in the forum and not widely used.

 

[Brendan Burgess]

I suspect anger rather than imbecility is your real stumbling block to understanding.

Agree fully.

Zen, I understand why you are seeing red (and purple and maroon) but it's not helping you to understand the system and take decisions accordingly.

Brendan