Just got Allocated a Shared Ownership Property- Mortgage & Solictor Advice Please

Congratulations, and that is almost the hard part over (getting a place allocated to you)

We finally moved in our SO in December too. From allocation to move, it was nearly 4 months and we pushed all the way)

You need to get in touch with a mortgage advisor (full market, independent) for advise on which mortgage would be suitable for your circumstances. They shouldn't have to charge you a fee either !!!

Also contact the HA for a recommendation on a solicitor. We paid about £1000 including all disbursements but no stamp duty for our purchase which was 50% of £150K.

HTH, otherwise shout again.

When you buy a new shared ownership property you get a choice on how much (if any) SDLT you pay.

You can either pay on the present market value - so £160,000 market value means £1,600 SDLT but £125,000 market value means NO SDLT! - or on the share purchased - with a 50% share on £160000 full value this would be £800.

Yes, you DO pay SDLT on the price if it doesn't exceed £125,000 because the exemption only applies if the rent being paid on a new lease is less than a certain figure and the rents in these cases are always over the figure!

It is a very complicated calculation but in some cases when you buy further shares the SDLT office can catch you for more SDLT but you don't get charged any more at all ever if you are the first lessee of a new shared ownership lease and you pay on the full market value.

I had a case recently where a client bought 50% of a house worth £250,000.
He paid £2,500 SDLT because I warned him that he would be caught if he wanted to buy a further share and the value had increased. If the value went up to say £300,000 by the time he bought the other 50%, they would treat the two as one "transaction" so £125,000 for first half + £150,000 for second half = £275,000. What's the SDLT on £275,000? £8,250! If he paid £2,500 to start with he would have no further tax to pay - that's the way the rules work. If he only paid £1,250 then when he bought the other half he would have to pay £7,000 because they retrospectively apply the 3% rate to the whole "transaction" and they ask for the difference!

The rules are even more complicated actually but you can see why it is so confusing! If you really want some exciting bedtime reading have a look at : http://www.hmrc.gov.uk/so/tech-newsletter2.pdf where it is all explained!

How you choose how much SDLT to pay depends upon the value of the property and whether it is lkely to go through a SDLT threshold and whether you will be buying further shares.

As a conveyancing solciitor I believe this may be helpful and provide pointers to people but I cannot accept any responsibility to anyone other than a paying client.

izoomzoom wrote:

Also contact the HA for a recommendation on a solicitor. We paid about £1000 including all disbursements but no stamp duty for our purchase which was 50% of £150K.

Just wondering izoomzoom - now that I FINALLY understand the intricacies of SO stamp duty - does your house qualify for Disadvantaged Areas Relief? Because if so, what you've said sounds right - no SDLT on a present market value up to and including £150k. But if not, I reckon you might still get a bill from the Inland Revenue.