Claiming Housing Benefit
if you sell your home
and rent it from the new owner
9
Claiming Housing Benefit if you sell
your home and rent it from the new owner
Contents
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1 I won’t be able to afford the rent if I sell my home - will I be entitled to Housing Benefit? 1 Claiming Housing Benefit within five years of selling your home
2 How to show the council that you had to sell your home 3 If you don’t have to sell your home
3 Examples of situations where Housing Benefit may be refused
3 If I decide to sell my home, will its value affect my claim for Housing Benefit? 3 When the value of your home is counted as ‘savings’
Claiming Housing Benefit if you sell your home
and rent it from the new owner.
This leaflet explains whether you may be able to get Housing Benefit if you sell your home and then rent it from the new owner. The leaflet is only a guide and does not cover every circumstance. You should consider all of your options before making a decision to sell your home and rent it from the new owner. We also strongly recommend you get independent advice from your local council or the Citizens Advice Bureau before making any decisions based on this leaflet.
I won’t be able to afford the rent if I sell my home
-will I be entitled to Housing Benefit?
Possibly - Housing Benefit can sometimes provide help with the rent in these circumstances. But certain strict conditions apply. These are listed below.
Claiming Housing Benefit within five years of
selling your home
Usually, you will not be entitled to Housing Benefit if:
● You rent the home you once owned as a freeholder or
leaseholder, and you claim Housing Benefit within five years of selling that home.
This is called the ‘former owner rule’. The rule does not
apply:-● If you satisfy us that you could not have stayed in your home
without selling it.
● After five years have passed since you sold your home.
The former owner rule would still apply if you made a claim at any time within five years of selling that home, even if you could afford the rent at the time of sale but a change in your circumstances meant you later needed to claim Housing Benefit.
How to show the council that you had to sell
your home
This can be difficult. You have to give us good evidence showing why you had to sell your home. This may be:
● Letters from your mortgage lender about action they would take to
collect any debts.
● Proof of your income and outgoings at the time you decided to sell. ● Evidence of other factors involved in your decision to sell.
You don’t need to show that keeping your home was completely impossible. But you do need to show that it was so difficult that you were forced to sell.
We will decide whether we are satisfied you had no option but to sell if you were to stay in your home, based on the facts of your case and the evidence you give. If you sell your home when you had other reasonable choices (see below), you won’t be entitled to Housing Benefit.
When deciding whether you qualify for Housing Benefit, we may take into account things like:
● Whether you could have claimed benefits to help with your
home-ownership costs, such as Income Support, Jobseeker’s Allowance, Employment and Support Allowance and State Pension Credit.
● Whether you had debts that were secured on your home and
whether these debts were likely to lead to your mortgage lender taking back your home.
If you don’t have to sell your home
If you sell your home and we decide you could have stayed in it without selling, then we will refuse your Housing Benefit claim. For example, we may refuse your claim if you sold your home to:
● Repay unsecured loans, such as for credit cards or
hire-purchase agreements.
● Reduce your monthly outgoings so that you could follow an
interest, such as being a student or setting up a new business.
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Examples of situations where Housing Benefit may
be
refused:-If you sold your home because you were in mortgage arrears, and had substantial debt or other financial
commitments, but we decide there was no immediate threat of you losing your home.
If your personal, family or financial circumstances meant that you felt you had to sell your home, but we decide that you could have sought advice or taken other steps to retain ownership of your home.
If you signed over your home to relatives, whether payment was or was not made for the property but we decide that there was no need to do so.
If you sold your home to use the equity released to clear other unsecured debts such as credit card and gambling debts.
If I decide to sell my home, will its value affect my
claim for Housing Benefit?
It depends. The amount of your savings will affect your claim. By ‘savings’ we mean money and assets, for example money in a bank or building society account, Premium Bonds, National Savings Certificates, stocks and shares, and property. Depending on how much savings you have, Housing Benefit may be reduced or not paid at all. The value of most types of savings is counted when deciding Housing Benefit, but some types of savings are not counted.
When the value of your home is counted as ‘savings’
If we decide the value of your home should be counted as savings, this will affect your claim for Housing Benefit.
If we decide that the reason you sold your home was to claim Housing Benefit, then we will count the market value of your home, less any outstanding mortgage as savings. Depending on the
amount, this may reduce your Housing Benefit, or may mean you are not entitled to any.
Important information about this leaflet
This leaflet is only a guide and does not cover every circumstance. We recommend that you get independent advice before making financial decisions based on this leaflet.
If you have any questions or need more information, contact us or the Citizens Advice Bureau.
Other leaflets available
This guide is one of a number produced with the aim of helping customers understand Housing and Council Tax Benefit. Leaflets
available:-1 Help with rent and Council Tax for people of working age 2 Help with rent and Council Tax for Pensioners
3 Information for Landlords and Agents 4 A guide for Students
5 A guide to Overpayments and Debt
6 Can you backdate my Housing Benefit and Council Tax Benefit?
7 What to do if you think the decision about your Benefit is wrong 8 A guide to Discretionary Housing Payments
9 Claiming Housing Benefit if you sell your home and rent it from the new owner
If you have any questions about Housing Benefit or
Council Tax Benefit please contact us by:
Phoning us on 0300 123 70 70
Visiting your local council office, or looking at our
website www.durham.gov.uk
Citizens Advice Bureau (CAB)
If you need independent advice, contact your local Citizens Advice Bureau. You can find their phone number and other local advice agencies in the phone book, at your local library or by contacting us. Welfare Rights
For advice about Social Security, Local Government benefits or Tax Credits tel: 0191 370 8787 or email: welfare.rights@durham.gov.uk
