SDLT and staircasing

AliceBanned

Hi
I've done some research but this seems a bit complex as SDLT rules have changed. I bought 40% of a SO property in 2013 (then worth £155k full price, no stamp duty required or mentioned as rules were different) and am looking to buy the remaining 60% soon. Standard conveyancing quotes online come back with £1800 stamp duty but I am only staircasing (current full market value £215k and this purchase/share around £126k).


There is little information on staircasing as I am effectively a first time buyer but not classed as one in terms of stamp duty!


Thanks for any advice. I will be purchasing around October/November and need to have an idea of extra costs. I haven't yet done full mortgage application.

Tom99

How can you be 'effectively' a first time buyer when you have already purchased a share of a property?

00ec25

AliceBanned wrote: »

Hi
I've done some research but this seems a bit complex as SDLT rules have changed. I bought 40% of a SO property in 2013 (then worth £155k full price, no stamp duty required or mentioned as rules were different) and am looking to buy the remaining 60% soon.

please explain exactly what you mean by that as everything depends on that answer

did you make a "market value election": yes or no?
If you don't know you need to find out - check your original conveyancing paperwork, even ask your old solicitor if needs be. It is vital you know the correct answer

AliceBanned wrote: »

There is little information on staircasing .

there is perfect info available, but it is difficult to understand until you have read it several times

https://www.gov.uk/guidance/sdlt-shared-ownership-property

AliceBanned

Tom99 wrote: »

How can you be 'effectively' a first time buyer when you have already purchased a share of a property?

It's the same property.

AliceBanned

00ec25 wrote: »

please explain exactly what you mean by that as everything depends on that answer

did you make a "market value election": yes or no?
If you don't know you need to find out - check your original conveyancing paperwork, even ask your old solicitor if needs be. It is vital you know the correct answer
there is perfect info available, but it is difficult to understand until you have read it several times

https://www.gov.uk/guidance/sdlt-shared-ownership-property

Thanks. At the time the property was below the stamp duty threshold I believe. All I can see on my legal paperwork is a £70 fee which I think is for SDLT form filling/processing. Market value election as never mentioned and I am sure I would have been asked by the conveyancer what I wanted to do, had it been an option. ?


I am confused about the thresholds and dates and whether the next share will be 'linked' to the first one given that I didn't even qualify for stamp duty when I bought the first share ie the the whole property didn't qualify.

00ec25

AliceBanned wrote: »

Thanks. At the time the property was below the stamp duty threshold I believe.

you state the value was 155k when purchased "in" 2013. The sdlt threshold was 125k in 2013
https://www.stampdutyrates.co.uk/historic-rates.html

the FTB incentive ended on 1 Jan 2012 so I ask again, you need to find out exactly what was declared for SDLT purposes in 2013.
You need to know if a market election was made, if you can't understand from the paperwork, then ask HMRC directly as they will have recorded your status

AliceBanned wrote: »

Thanks. At the time the property was below the stamp duty threshold I believe.
I am confused about the thresholds and dates and whether the next share will be 'linked' to the first one given that I didn't even qualify for stamp duty when I bought the first share ie the the whole property didn't qualify.

if a market value election was made you do not need to pay a penny more now

if it was not, you do. The calculation is explained in the link

AliceBanned

But in 2013 I was a FTB so exempt I think.


I will contact the solicitor tomorrow as this will probably be quicker and the files were all online via their portal. I don't seem to have anything in my paperwork that mentions a stamp duty payment.


Thanks for your help and the link, I will get the full info then have another look through, it is hard to get my head around because of SO issue and because I was FTB at the time!

AliceBanned

Sorry I missed the bit about the exemption ending in Jan 2012. It's strange that I never had a conversation with the solicitor - they really should have explained this when I bought the original share! So I could prepare better for the future but I am certain I was not asked about making a stamp duty payment at the time.

AliceBanned

Thanks 00ec25 that's exactly it. I am pretty sure I didn't do the market election but I will check tomorrow.


When I did a vague calculation I came up with £900 stamp duty payable if I go ahead with the share - yes had independent valuation and full sale price should be £215k. So I wasn't too far off but you are right the maths was confusing me. Especially the mention of the 80% share in the link - couldn't get to grips with this, many thanks.

SDLT_Geek

I agree with most of what 00ec25 says, but not with all of the calculation. Here is my take on it:

1. If a market value election had been made in 2013 SDLT would have been due in "one go" on the lease. It would have been 1% of £155,000, that is £1,550. Given what follows it seems that you might have done best by not making that election.

2. First time buyers relief now is out of the question.

3. The calculation of the SDLT due on staircasing to 100% now would look like this:
Payment made in 2013: £62,000.
Payment to be made now: £129,000

Total payments made £191,000.

Work out the SDLT that would be due on £191,000. It is £1,320 (2% of the £66k excess of £191k over £125K).

The actual SDLT is a fraction of that £1,320. The fraction is £129,000 / £191,000.

The SDLT now due as £892.

There is no need to look back to see if SDLT is now due on the 2013 grant of the lease (because linking only works one way).

I expect 00ec25 will be so kind as to approve the calculation and make reference to the promise he had made to himself to hold back from answering these questions!

AliceBanned

Thanks SDLT Geek. I haven't yet managed to access my previous solicitor's documents on the online portal - they are supposed to be getting back to me. I am pretty sure I would have remembered the previous Stamp Duty if I had paid it!