Shared Ownership & Stamp Duty Fee, HELP

JC509

Hi, guys, I'm very confuse of the situation we have atm, I'm urger for help.

We're recently bought a shared ownership house with 25% share. According to our solicitor that we have to pay about £1999 Stamp duty fee. By my understanding is that ppl do not need to pay any stamp duty fee if their purchase price is under £125,000. But according to my solicitor, that the leasehold agreement states that stamp duty needed to be paid at full market value.

Background:

25% shared ownership for £45,000

Full market value: £180,000

I would be very appreciated for any advise,, thank u for ur time.

dumpallhere

SDLT on a shared ownership property -> How SDLT is calculated on a shared ownership lease

JC509 wrote: »

the leasehold agreement states that stamp duty needed to be paid at full market value.

So, can the leasehold agreement be changed to accommodate the option that suits you best (i.e.- paying SDLT in stages)?

JC509

dumpallhere wrote: »

SDLT on a shared ownership property -> How SDLT is calculated on a shared ownership lease


So, can the leasehold agreement be changed to accommodate the option that suits you best (i.e.- paying SDLT in stages)?

My solicitor is checking it with the vendor atm, but she don't thinks they will change it. This is really not fair, what if in the future we do not want to buy the rest of the share but we have already pay the full market value stamp duty fee and its not refundable.

richardw

Is it a lease or under lease you are getting?
Is the HA the freeholder ?

BMW_Mike

I have to say this is tricky one - The Gov Web site details how Stamp Duty is calculated on a Share to Buy House, there is a choice, pay it all up front - or pay in parts, from initial purchase then on the transaction that takes you over 80% of the value of the house.

The lease we have lets us have the choice - We have gone for the initial option - who knows we might sell it before we staircase to 80%, - anything could happen.

I guess if it is a term of the lease, - it is a bit pedantic in that you are trying to buy an affordable home, then have to stomp up the full Stamp duty, it's unfortunate but there is little to be done.

Whether you or your lawyer could challenge the terms of the lease - maybe but it would be tricky.

sarah8586

When we bought our shared ownership flat we only paid Stamp Duty on the portion that we were buying. Turned out our portion was £126,500 so we paid 1% stamp duty on that . If it had been £124,999 we would not have had to pay any stamp duty.

If you decide to staircase later on, then you will have to pay stamp duty on your existing part and the new portion you are buying if your total share then exceeds £125,000.

Tjrw1985

That is not true at all sarah.

You would not have to pay stamp duty on the part you already own if it is below the threshold.

You only pay the SDLT on the part that takes you over 80%. (i.e you buy 50% (£80k)of a house worth £160k FMV, No stamp duty is due) You then staircase to 100% (for arguments sake the value has not changed) so you pay 1% on the second £80k (£800) not 1% on the £160k.

gaz141

when I bought mine last year, I had the option of paying nothing as my share was under the threshold (which I did) but with the understanding that if I did one day staircase then I had to pay stamp duty on whatever value the property was worth or I could have paid the stamp duty on the full value of the property at the time of purchase, therefore if I ever did staircase then there was no stamp duty to pay, even if my flat had increased in value into the next stamp duty bracket.

JC509

Thank you guys, I was told by our solicitor that we HAVE to pay stamp duty fee and there's no way out. Then I rang the housing association who are owning the other 75% of the property. They told me straight away that I was right, we did not have to pay the stamp duty fee and we have an option whether to pay it now or later when we buying more share. It was our solicitor's mistake and she didn't fully undertand the contract.
Thank god!!:)