SDLT on Shared Ownership Staircasing

Carlington

Thank you - Does the rate increase after march? My current term doesnt expire until Aug 2025, so the earliest I could seek a new deal would be May. Kind Regards.

SDLT_Geek

Carlington said:

Thank you - Does the rate increase after march? My current term doesnt expire until Aug 2025, so the earliest I could seek a new deal would be May. Kind Regards.

Yes, the rates increase.  So the last lines of the calculation would look like this:

SDLT on £342,000 at the rates in place from 1 April 2025 would be £7,100.

You pay a fraction of this.  On my assumptions the fraction is 85/342.  That gives SDLT due of £1,765.

Carlington

Thank You for your help, much appreciated. Wish me luck

Prettyfly

Hello SDLT_Geek , would you be able please to help us with our query below?

We purchased 60% of the shared ownership house in Oct' 22 for £294k. Total market value of the house is £490k at the time when we were purchasing it.

We are now hoping to buy the remaining shares and staircase to 100%. Back in 2022 we elected not to pay SDLT at that point. We are wondering how much would be the SDTL for us to pay when acquiring the remaining shares and becoming 100% share owners.

Would there be also any change after April '25 that would impact our tax bill?

Many thanks!

SDLT_Geek

Prettyfly said:

Hello SDLT_Geek , would you be able please to help us with our query below?

We purchased 60% of the shared ownership house in Oct' 22 for £294k. Total market value of the house is £490k at the time when we were purchasing it.

We are now hoping to buy the remaining shares and staircase to 100%. Back in 2022 we elected not to pay SDLT at that point. We are wondering how much would be the SDTL for us to pay when acquiring the remaining shares and becoming 100% share owners.

Would there be also any change after April '25 that would impact our tax bill?

Many thanks!

So in October 2022 you bought from the social housing provider?  (Not from someone who had previously bought from a social housing provider?). 

To double check on the SDLT then, if you were first time buyers I expect there would have been no SDLT to pay, otherwise you would have paid £2,200.  I am right, and which was it?

What figure should I assume for the market value of the property now?  Say £500K, so you are paying 40% of that being £200,000?

Prettyfly

Hello, yes correct, we bought from the housing association, it is a new built house, no previous owners.

Yes, we were first time buyers and we did not pay any stamp duty when we bought 60%.

For 40% the value is £196k. 60% was £294k therefore total £490k.

SDLT_Geek

Prettyfly said:

Hello, yes correct, we bought from the housing association, it is a new built house, no previous owners.

Yes, we were first time buyers and we did not pay any stamp duty when we bought 60%.

For 40% the value is £196k. 60% was £294k therefore total £490k.

The chargeable consideration for the linked transactions is £490,000.

The SDLT due on buying the last 40% is a fraction of the SDLT on £490,000.
The SDLT due on £490,000 if completion is before the end of March 2025 is £12,000.
The fraction is £196K/£490K.
That gives SDLT on staircasing out of £4,800.

Running the figures again for completion after the end of March 2025, the SDLT on £490,000 would be £14,500.
Taking the same fraction gives SDLT on staircasing out of £5,800.