Staircasing on Shared ownership property

johneboy1886

Have a couple of questions that Nottinghill Housing refuse to answer for me.

I have a shared ownership property with Nottinghill Housing, which im looking to staircase on; however, i need to know the answers to a couple of questions.

As i am looking to staircase in my original property, am i still termed as a 1st time buyer? This would relate to the new stamp duty rules.

Also when i bought my property it was valued at over £250k, so i paid 3% stamp duty on the percentage which i bought. I recently had it valued and it is now under £250k and i now have to pay the remaining percentage of the new valuation. Do i still pay the 3% stampduty or would i now pay 1% as it is under £250k?

I am a bit of a loss and any help would be greatly appreciated!

Richard_Webster

1.Were you the first person to buy the property from the HA?

2.What percentage did you buy and when?

3.How much did you pay for your percentage?

4.What was the full market value when you bought?

5.What is the full market value now?

There are special rules that apply to Shared ownership and SDLT.

If I know the answers to the questions I can explain your position now. You may not have to pay any more SDLT because of the way these rules work.

You cannot be a first time buyer for the SDLT exemption because you already own a lease of the property.

johneboy1886

1. I was the 1st person to buy the property

2. I bought a 70% share in December 07

3. I paid £178500 and paid 3% stamp duty on this

4. £255k

5. £225k

Thanks

Fire_Fox

Have you read the Inland Revenue website or rang them for a chat? Horse's mouth and all that.

Richard_Webster

I paid £178500 and paid 3% stamp duty on this

I assume, but please confirm, that you paid £7650 SDLT on the full value. Is that right? You had a choice of paying on the full value when you bought (which means no more SDLT when you staircase) or paying only on the price of the percentage at that time and taking your chances on SDLT later. You must have opted to pay the 3% on the £255K.

If so you don't need to pay any more SDLT and this has nothing to do with the FTB exemption or anything else.

You would have had the alternative option of only paying £1785 SDLT when you bought but then you would have to have pay on the further amount when you staircase. They calculate it by adding up the total amount that you have paid for the property (the 70% + the 30%) and they apply the rate applicable to the total.

If as might have been thought possible, the value of the property increased to say £300,000 by the time you staircased, then 30% of £300K is £90K. Add that on to £178.5K and you get £268.5K which means that when you bought the remaining portion you would have had to have paid 3% of £268.5K = £8055 less the £1785 already paid so an extra £6270 would have been payable if the value was £300K. The total SDLT would have been more than the £7650 so paying that amount to start with has limited your future liability on staircasing.

As it has happened, although you now should not have to pay any more now, if you had opted to only pay £1785 when you first bought you would have been better off because 30% of £225K = £67.5K which when added to £178.5K gives a total of £246K and SDLT on that is only £2460 and you would have paid only an extra £675 now. You would be £7650-£2460 = £5190 better off.

Hindsight is a wonderful thing!

johneboy1886

Sorry about delay getting back to you, but your help is very much appreciated!!!

I did pay £7650. Hindsight is a wonderful thing, but im just glad that i dont need to pay anymore!!

Thanks again