The Local Authorities (Capital Finance and Accounting) (Wales) Regulations 2003

Capital receipts reduced by costs of buying back and improving dwellings

17.—(1) For the purposes of calculating the amount specified in regulation 10(4)(a), capital receipts derived from a disposal by a local authority of an interest in a dwelling, which meets the conditions specified in paragraph (2), must be treated as reduced by an amount determined in accordance with paragraph (3).

(2) For the purposes of paragraph (1), the disposal meets the conditions specified in this paragraph if—

(a) prior to the disposal, an interest in the dwelling was disposed of by the local authority under Part 5 of the Housing Act 1985 (right to buy) (“the initial sale”);

(b) within the period of five years beginning on the date of the initial sale, the local authority reacquired that interest in the dwelling (“the repurchase”);

(c) the disposal is made by the authority within the period of three years beginning on the date of the repurchase;

(d) the authority makes the initial sale and the disposal by, in each case—

(i) conveying the freehold interest in the dwelling;

(ii) granting a lease of the dwelling for a term of not less than 125 years;

(iii) assigning its entire leasehold interest in the dwelling; or

(iv) granting a shared ownership lease; and

(e) where the interest disposed of is a lease other than a shared ownership lease, the authority estimates that not less than 90 per cent of the capital value of the lease has been, or is to be, received by it within one year of the date of the disposal.

(3) The amount of the reduction, for the purposes of paragraph (1) is—

X + Y + Z

where—

• X and Y have the same meaning as in Regulation 17(3); and

• Z is the amount of expenditure incurred by the authority in enhancing the value of the interest in the dwelling between the date of the repurchase and the date of the disposal.