Clawback is a measure put in place to keep speculators away from AHP. It is a good idea in theory, but in practise the terms are punitive.

It works like this:

A figure is set by the AHP in consultation with the developer. This is called the Market Price. This Market Price is more often than not a fantasy price which never existed anywhere except for a brief period at the peak of the property bubble in late 2006. Evidence of this systematic overvaluation of the property offered under the AHP scheme is rife: the forums www.neighbours.ie and www.AskAboutMoney.com contain many threads by people in the process of purchasing an Affordable Home who are baulking at the very high Market Price that is being put onto their contracts. For example, the AHP attempted to set the Market Price of 3 bed Apartments in the Beacon apartment development in Sandyford at €800K when they were being sold for €350K under the AHP scheme.

The importance of the Market Price is this. If the owner of an AH property sells within 10 years for more than they paid, they must repay 100% of any profits made, up to the threshold of the Market Price. After 10 years, the amount they must repay reduces by 10% every year, until eventually, after 20 years they are entitled to sell for a profit with no clawback.

For example, if a person bought at €200K, with a Market Price set at €350K, and sold 5 years later for €300K, they must repay the €100K profit to the AHP. If they sold for €400K they would have to repay €150K, and would get to keep €50K of the profit. In the current housing market, selling for a profit is unlikely to be a big problem anyway, but it's worth noting that Affordable Housing is not a step on the ladder. It is not a means to an end. If the actual property you are being offered is not appropriate for you, then you really should walk away, because you are not going to use it as a stepping stone to purchase a bigger and better property.

The clawback rule does not apply if you sell for less than you bought it.