Stamp Duty shared ownership resale

Ameba

Hi All,
Wondering if anyone would be able to advise
We're buying (attempting) a shared ownership resales property. The shares are worth around 170K, with full market value under 500K. Both first-time buyers. 
It is (was) my understanding that no Stamp Duty would be due, even when the Stamp Duty Holiday ends on 30th June 2021. However, the solicitors have contacted us that according to info on our initial form, the amount of SDLT to pay would be £9000. 
I will of course contact the directly tomorrow, but thinking - is there anything I may be missing here? 
Any tips will be greatly appreciated. 

Sotts

Stamp duty would normally be due but not while we have the stamp duty holiday.
Tell your solicitor you want to declare the full property amount instead of just the share you're buying otherwise you'll be liable for the bit you don't purchase if you come to staircase in the future 

Ameba

Sotts said:

Stamp duty would normally be due but not while we have the stamp duty holiday.
Tell your solicitor you want to declare the full property amount instead of just the share you're buying otherwise you'll be liable for the bit you don't purchase if you come to staircase in the future 

Thanks! It doesn't look like we will be able to complete before 30/06/2021 though so declaring full value will most likely incur additional cost

[Deleted User]

Ameba said:

Hi All,
Wondering if anyone would be able to advise
We're buying (attempting) a shared ownership resales property. The shares are worth around 170K, with full market value under 500K. Both first-time buyers. 
It is (was) my understanding that no Stamp Duty would be due, even when the Stamp Duty Holiday ends on 30th June 2021. However, the solicitors have contacted us that according to info on our initial form, the amount of SDLT to pay would be £9000. 
I will of course contact the directly tomorrow, but thinking - is there anything I may be missing here? 
Any tips will be greatly appreciated. 

Even when the SDLT holiday ends the SDLT relief for FTB will still be in place. This relief means FTB won’t pay any SDLT on purchases up to £300k and 5% SDLT on anything over £300k up to £500k. 

As I understand it when you buy a SO property you can choose to pay SDLT based on the value of the share you are buying which means more SDLT further down the line if you choose to staircase and buy a larger share or you can elect to pay the SDLT based on the full market value now which would mean no further SDLT further down the line if you staircase. It’s a bit of a gamble as the choice is £0 SDLT versus £9k SDLT and the latter might end up being less expensive if your intention is to one day staircase to 100% ownership. 

@SDLT_Geek is the resident expert in SDLT though especially when it comes to SO. 

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

SDLT_Geek

A problem with the option to pay SDLT on the whole market value of shared ownership property, is that it only applies on the initial acquisition from the social landlord, not on a re-sale.  OP says this is a "resales property".  If that means OP is not buying from the social landlord then the option is not available.
My view is that SDLT can work out relatively well on such resale properties.  That is because there is no "linking" between:
(a)  The acquisition from the previous owner (here say £170,000) and 
(b)  Staircasing payments made to the RSL later.

[Deleted User]

See, I said @SDLT_Geek is the expert. 

Ameba

@SDLT_Geek many thanks for your reply! Would you be able to tell me a bit more on future staircasing vs SDLT in our scenario please? 
We're buying from the current owners, with approval from Housing Association. 
With regards to SDLT due on our purchase, this should be zero up until end of September, is that correct?
@Lover_of_Lycra you did 😉

SDLT_Geek

Ameba said:

@SDLT_Geek many thanks for your reply! Would you be able to tell me a bit more on future staircasing vs SDLT in our scenario please? 
We're buying from the current owners, with approval from Housing Association. 
With regards to SDLT due on our purchase, this should be zero up until end of September, is that correct?
@Lover_of_Lycra you did 😉

There is generally no SDLT on staircasing until the percentage owned exceeds 80%.  It is only the staircasing steps going over 80% which can incur SDLT.  So if for example OP acquired another 50% of the property by staircasing in one go, paying £240,000 and thereby achieving say 85%, then the SDLT would be assessed on the £240,000 with no linking to the price paid for the property from the previous owner. 

Until the end of September 2021, the first £250,000 of the chargeable consideration will usually be free of SDLT.  That is what I would expect here, as presumably the 3% surcharge for additional properties does not apply, nor the 2% surcharge for non UK resident buyers.

Ameba

Thank you @SDLT_Geek, that's very helpful!