Stamp Duty question for Shared Ownership

WLITC

Can someone advise, I am a little confused with what Stamp Duty I will have to pay for my upcoming purchase of a Shared Ownership apartment. I thought I had it clear, but in the last budget they announced a change for first time buyers purchasing a Shared Ownership house under £500k and I just can't seem to get my head around it.

The property I am looking at is valued around £330k and I will be buying a 40%, so a value of £132k. Now my understanding is its 0% for up to £300k and then % for £301-£500k. So how much do I have to pay? Am I paying on the share I buy, i.e £132k and therefore no Stamp Due due, or on the full value? I've also read that if you buy a share and pay rent (which I will at around £440 pcm) you pay a % based on what that would be over a certain period? Can someone try and help me calculate it or advise?

00ec25

what is it that you cannot read on page 10 & the example on page 11?

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/759714/Stamp_Duty_Land_Tax_relief_for_first_time_buyers_-_guidance_note.pdf

WLITC

Thanks for this link, I think I have established based on that example and then finding the calculator on the HMRC site that it'll be zero :j

SDLT_Geek

You might want to consider electing to pay SDLT on the market value. That way there would be no SDLT to pay if and when when you staircase to over 80%. On the basis of a market value of £330,000 and first time buyers' relief applying the SDLT would be 5% of £30,000 which is £1,500.

There are some worked examples of whether it is sensible to elect for market value treatment in section 8 of the detailed paper available from this link: https://www.blakemorgan.co.uk/attachments/189836/10_SDLT_first_time_buyer_s_relief_18.11.18.pdf

You will need to consider how likely you are to staircase to over 80% and whether it is worth "banking" your first time buyer status now. You will never regain it, not even for a staircasing transaction.

WLITC

SDLT_Geek wrote: »

You might want to consider electing to pay SDLT on the market value. That way there would be no SDLT to pay if and when when you staircase to over 80%. On the basis of a market value of £330,000 and first time buyers' relief applying the SDLT would be 5% of £30,000 which is £1,500.

There are some worked examples of whether it is sensible to elect for market value treatment in section 8 of the detailed paper available from this link: https://www.blakemorgan.co.uk/attachments/189836/10_SDLT_first_time_buyer_s_relief_18.11.18.pdf

You will need to consider how likely you are to staircase to over 80% and whether it is worth "banking" your first time buyer status now. You will never regain it, not even for a staircasing transaction.

Thanks was already wondering about this as I got the same figured on the HMRC calculator when I changed it to market value to see the difference. Given my first time buyer status would it still be worth if to do this if even if I only staircased at least once but not necessarily over 80%?

00ec25

WLITC wrote: »

Given my first time buyer status would it still be worth if to do this if even if I only staircased at least once but not necessarily over 80%?

make a market value election and FTB status means you pay £1,500

make a staircase election at a cost of 132k as a FTB AND NEVER go over 80% and you will pay £0

WLITC

Okay one last question. At what point do I have to decide if I pay just for the share I buy vs full market value? Did I read you have 30 days to pay after completion? Do I get until then to decide?

SDLT_Geek

The lease needs to contain a clause containing your election if you wish to pay it all in one go on market value, so you need to decide early and well before completion.