Stamp Duty - What do I pay for Staircasing?

lifeinstripes

Hi All,

I have a query regarding whether I will need to pay stamp duty when I Staircase from 75% to 100% of the property I own. All the information out there is very confusing for the specific scenario I'm in. I'll attempt to bullet point the details below:

• I purchased 75% of a Shared Ownership new build property under the First Time Buyer scheme back in May 2018.
• Total value of the property price was £200,000 at the time.
• 75% that I own worked out to £150,000.
• The remaining 25% is owned by a Housing Association.

I'm now hoping to staircase the remaining 25%, so that I own 100% and it allows an easier process when it comes to eventually selling the property.

My question is, am I liable to pay stamp duty on the remaining 25%? The property is now worth roughly £220,000 and therefore I will be purchasing the remaining £55,000.

Just to complicate matters it's unclear whether my Solicitor marked me down as paying stamp duty on the market value of the property or whether it's been marked as paying stamp duty in stages.

Could someone kindly clarify if and what stamp duty would need to be paid for either scenario please? The scenarios being whether it's in stages or the entire value of the property at the beginning.

Cheers!!

Mizydoscape

When I bought a home using a 25% shared equity loan back in 2013 I paid Stamp duty on the full market value of the property so it is likely you already paid this (or were exempt at the time of purchase as a first time buyer under the threshold). 

SDLT_Geek

First time buyers' relief was in place in May 2018 so it would have made sense to have elected for SDLT to have been assessed on the market value as no SDLT would have been due anyway.

Even if the election was not made, your total payments of £150,000 and £55,000 come to £205,000 which is below the SDLT threshold if you complete by 30 September 2021, so there would be no SDLT on this basis either.

Slithery

Mizydoscape said:

When I bought a home using a 25% shared equity loan back in 2013 I paid Stamp duty on the full market value of the property so it is likely you already paid this (or were exempt at the time of purchase as a first time buyer under the threshold). 

You are given the choice whether or not to pay the SDLT on the full market value, just because you did so doesn't mean that the OP did (as they pointed out in their post).

lifeinstripes

SDLT_Geek said:

First time buyers' relief was in place in May 2018 so it would have made sense to have elected for SDLT to have been assessed on the market value as no SDLT would have been due anyway.

Even if the election was not made, your total payments of £150,000 and £55,000 come to £205,000 which is below the SDLT threshold if you complete by 30 September 2021, so there would be no SDLT on this basis either.

Thanks everyone for your responses.

SDLT_Geek - Agree with what you’re saying, I need to chase up with my original solicitor to find out what they've marked it as on the paperwork.

That’s useful to know, thank you. If I’m unable to complete the staircasing transaction by the 30th of September, would this then mean I would need to pay SDLT? If so how much? Apologies for all the questions, I’m still trying to wrap my head around it all!

Cheers!

SDLT_Geek

In the unlikely event of the market value election not applying (for which you could look at your lease) SDLT would be worked out as follows.

Total chargeable consideration is £205,000.  SDLT on this sum after 30 September 2021 would be £1,600.  But the SDLT is a fraction of this.

The fraction is £55,000 / £205,000.  That gives SDLT of £429.

lifeinstripes

SDLT_Geek said:

In the unlikely event of the market value election not applying (for which you could look at your lease) SDLT would be worked out as follows.

Total chargeable consideration is £205,000.  SDLT on this sum after 30 September 2021 would be £1,600.  But the SDLT is a fraction of this.

The fraction is £55,000 / £205,000.  That gives SDLT of £429.

That’s really helpful, thank you!

Mizydoscape

Slithery said:

Mizydoscape said:

When I bought a home using a 25% shared equity loan back in 2013 I paid Stamp duty on the full market value of the property so it is likely you already paid this (or were exempt at the time of purchase as a first time buyer under the threshold). 

You are given the choice whether or not to pay the SDLT on the full market value, just because you did so doesn't mean that the OP did (as they pointed out in their post).

Interesting, thanks! I know Halifax paid it for me as it was the deal at the time with a FTB mortgage.