Print this PageClawback Example
The following example will help in understanding how the clawback works.
John and Mary buy an affordable home. The market value of this property is €280,000, and they buy it at an affordable price of €196,000. So, the market value discount to John and Mary, which is known as the clawback, is 30% or €84,000.
Scenario 1:
If they sell their affordable home after 5 years for €330,000, the clawback would be €99,000 (30% of €330,000). They would have to pay back €99,000 to the local authority. They would also have to repay any money owed to the mortgage lender to clear their mortgage.
Scenario 2:
If they sold their affordable home after 15 years for €430,000, they would have to pay back €64,000 (15% of €430,000) to the local authority. They would also have to repay any money owed to the mortgage lender to clear their mortgage.
Scenario 3:
If they sold their affordable home after 20 years, they would not have to pay any clawback, but they would have to repay any money owed to the mortgage lender to clear their mortgage.
