SDLT on Shared Ownership Property

ooga_chaka

Hi - can someone please confirm how much stamp duty we would have to pay if staircasing to 100% (acquiring freehold) on a shared ownership property - paying in stages

Transaction wise:

1. Acquired 25% at cost of 45,000 (2012)
2. Acquired addtional 25% at cost of 56,250 (so owned 50% total) - (2018)
3. Hoping to acquired remaining 50% (including freehold) at cost of 112,500 (2021)

So total spent to acquire 100% property would be £213,750.

I worked it out to be £1,775 as I assume the current no SDLT to pay under 250,000 wouldn't apply....

Any help/advise greatly appreciated

L_T_88

I believe the amount payable is based on market value at point of acquiring the shares which take you over 80%. In your case the market value for your final staircasing will be £225,000.

If you complete before the end of the holiday, then yes it will be £0.00. If you complete after, you will pay £2,000 (You will be in banding £125,001 - £250,000, so 2% of £100,000).

Happy to be corrected as will need to consider this myself in the future. The HMRC examples are all based on the market value being the same at initial purchase and point of staircasing.

ooga_chaka

So you think it we complete to 100% before end of September we wouldn't have to pay anything, even though the property was 'purchased' in 2012?

SDLT_Geek

The approach is to work out the total payments made (here £213,750) and apply today's rates of SDLT to them before taking a fraction of that notional SDLT.  Here the fraction would be £112,500 / £213,750.

But if completion is by 30 September 2021 and the notional SDLT is zero then applying the fraction will still give zero.

There is guidance from HMRC on the method, though it is far from clear.