Stamp duty on lease / Shared Ownership

monkeymonkeyrarara

I'm picking up the keys to my new flat on Monday, which I have bought on a 50/50 shared ownership scheme. my solicitor has just told me that I have to find an extra £570 for stamp duty on value of the annual rent I am paying.

This applies even though the value of my flat falls below the stamp duty threshold.

I'm gutted, there goes my ps3!! FTB beware!!!

Dan

Bargain_Rzl

What is the value of your flat? The WHOLE value?

Based on your figure of £570, I'm guessing that your share is worth £57k. However the stamp duty on Shared Ownership is calculated on the full market value of the property (assuming that the rent you pay is above a certain (small) figure). You can opt to pay it on the full value or simply on the share you are buying, but as far as the thresholds go, as long as the FULL value of the property is liable for SDLT you will certainly be liable for something.

There are implications of paying it only on the value of your share, as it means you'll have to pay it again if you ever staircase above 80% of the property's value.

I would speak to your solicitor for clarification if you are unsure.

There is a very useful guide document on the HMRC website but I don't have time to dig it out for you now as I'm dashing off to a meeting I suggest you google "stamp duty shared ownership"

Richard_Webster

On the face of it if you are paying £57K for a 50% share then I would expect you should have been advised to pay SDLT on the full market value (presumably £114K) and as £114K is under the threshold you shouldn't have to pay anything.

Bargain rzl and I have been round this rather complicated loop about SDLT and shared ownership before - the technical note he refers to is at:

http://www.hmrc.gov.uk/so/tech-newsletter2.pdf

I would ring your solicitor and ask him to explain further, just in case there is something I have missed.

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients.

Bargain_Rzl

Richard - I'm a she by the way

You are right of course - somehow I managed to overlook the OP's statement that it was a 50/50 split, in which case it will certainly be under the threshold anyway. I know the rules are slightly different if the lease does not permit staircasing beyond 80%, which the OP doesn't specify. Either way, that document's the one I was looking for and is very useful.

Richard_Webster

Bargain_Rzl wrote: »

Richard - I'm a she by the way

Sorry! :embarasse