Should I pay Stamp Duty now on SO flat?

united4ever

I'm buying a shared ownership flat and understand that I have the option of paying the stamp duty now at 1% on the value of the flat at present (£175 000). I'm buying 60% at £105 000.

Alternatively I could not pay the stamp duty but if I buy 100% in the future then I would have to pay stamp duty at the stamp duty rate at the time of purchase of 100%. The rate would also be based on the value of the property at the time of purchase of 100%.

I also believe that if I don't "staircase" up to 100% and sell my 60% share then if i do pay the stamp duty now then that money would be lost. Therefore I'm inclined not to pay it and hope that the stamp duty rate doesn't change too much.

Does this sound correct? (this is what a solicitor has advised me) If so, would you pay the stamp duty now or not?

Guy_Montag

Skip it, the stamp duty threshold is only likely to go up.

lynzpower

I had this too.

I decided not to pay it now, as if I sold before buying the 100% then obviously that SD would be lost into the coffers never to be seen again.

true enough - Ive lived here 2 years and am selling- bloody glad I never paid it in advance.

the other brainwave I had was that after the 60% is paid off ( or 40 in my case) there is nothing to stop you not staircasing and simply paying the rent on the place- and stashing the extra away in savings to pay lump sums off the house- but witohut a mortgage, saving interest. But indeed, there is nothing to stop you not buying any more shares and renting. Although some people would give the "dead money" argument, it COULD mean that in my case a 2 bed flat in inner london would be 350 a month in todays terms- which is cheap to the point of lunacy- but theres the loophole if you wanted to exploit it IYSWIM

united4ever

Thanks, I think I will not pay stamp duty. The rent is certainly subsidised. It's £132 a month for the 40% I'm not buying which would make the rent £330 for 100% which is clearly not an open market rental figure.

lynzpower

am i right in thinking you are the person buying in altrincham?

Good luck with it

united4ever

lynzpower wrote:

am i right in thinking you are the person buying in altrincham?

Good luck with it

Yes, buying in Altrincham, you have a good memory. Cheers

Manchester78_2

I am buying a shared ownership apartment in Manchester at 40% which equates to £67,000 on a flat costing £176,500. The company that is selling me the property gave me the impression that I definatly had to pay stamp duty and that the only thing I could choose was whether to pay stamp duty just on my share or on the whole property.

Havin read this thread it gives the impression that I should also have the option of not paying any stamp duty, is this correct or does it only apply in certain circumstances (i.e. areas exempt from stamp duty?)

lynzpower

manchester- are you buying from a private company or a housing association. i reckon thats the difference, tho I couldnt tell you why .

Manchester78_2

I am buying from a private company called Asset Trust Housing although apart from the fact its a private company it is almost identical to how you would purchase through a housing association I think.

kebl0826

Manchester78 wrote:

I am buying a shared ownership apartment in Manchester at 40% which equates to £67,000 on a flat costing £176,500. The company that is selling me the property gave me the impression that I definatly had to pay stamp duty and that the only thing I could choose was whether to pay stamp duty just on my share or on the whole property.

Havin read this thread it gives the impression that I should also have the option of not paying any stamp duty, is this correct or does it only apply in certain circumstances (i.e. areas exempt from stamp duty?)

Yes mate, I was advised exactly the same as you, ie I was told I would have to pay something.

I will wait to see what my Solicitors say...