Stamp duty on shared ownership

Alexc1984

Hello we are staircaseing to a 100%ownership of house from 40% ownership that was purchased in November 2017 for 74,000 (no stamp duty was paid at this point) we are now buying the rest of the property for 150,0000 with a total property value of 250,000. The conveyancing solicitor has said that we could be required to pay stamp duty, but could do a waiver as there is no clear guidance on wherever the duty is required or not in regards to shared ownership and the 250,000 rate. If we take the waiver are there any risks of prosecution ect to this, or would it just be a case of having to pay within the stamp duty within a short period of time? Would appreciate any insight anyone has with this. Thank you in advance.

SDLT_Geek

Alexc1984 said:

Hello we are staircaseing to a 100%ownership of house from 40% ownership that was purchased in November 2017 for 74,000 (no stamp duty was paid at this point) we are now buying the rest of the property for 150,0000 with a total property value of 250,000. The conveyancing solicitor has said that we could be required to pay stamp duty, but could do a waiver as there is no clear guidance on wherever the duty is required or not in regards to shared ownership and the 250,000 rate. If we take the waiver are there any risks of prosecution ect to this, or would it just be a case of having to pay within the stamp duty within a short period of time? Would appreciate any insight anyone has with this. Thank you in advance.

Is the property in England, so the relevant stamp duty is stamp duty land tax?

The way you describe what the conveyancing solicitor has said about the "waiver" is concerning.  SDLT is a self-assessed tax and there is a responsibility to consider the tax position properly.  A land transaction return will be required and it should be fully considered and honest.  There is a risk of a penalty for an incorrect return if the return is incorrect and reasonable care has not been taken.

To work out the SDLT should not be difficult, but will require some other information:

(a) The legal structure involved is that you have a lease of the house and have been paying a 60% rent?

(b)  In November 2017 did you buy from a social landlord (like a housing association) and were granted a new lease? (Rather than buying an existing lease from a previous owner of the house).

(c)  You are now buying the remaining 60% from the same social landlord?

(d)  Is is correct that you have no other property interests now other then the shared ownership house?

ResourcesShared

SDLT expert, Sean Randall, and consultant SO solicitor, Zahrah Aullybocus, collaborated on a 3-part article on SO and SDLT on the Shared Ownership Resources website. The article might be helpful in understanding your position, or at least in understanding what questions you might want to discuss with your solicitor.  HMRC have a Stamp Duty Helpline - 0300 200 3510. It would be worth calling them for their view on your solicitor's advice.

SDLT_Geek

ResourcesShared said:

SDLT expert, Sean Randall, and consultant SO solicitor, Zahrah Aullybocus, collaborated on a 3-part article on SO and SDLT on the Shared Ownership Resources website. The article might be helpful in understanding your position, or at least in understanding what questions you might want to discuss with your solicitor.  HMRC have a Stamp Duty Helpline - 0300 200 3510. It would be worth calling them for their view on your solicitor's advice.

Agreed, that is a useful website.  It is here: https://www.sharedownershipresources.org/category/need-to-know/stamp-duty/

I find the HMRC Stamp Duty Land Tax helpline is rather hit and miss as to how helpful it is.

stuartp2000

If when you asked to staircase the open market value of the property was accessed and that is 250k then stamp duty is payable at a rate of 0%

If in 2017 you purchased your share and the full value of the property was under 250k than again stamp duty was payable at 0% or this is a first property in which case the threshold is 425K not 250k

When I purchased my 40% share in 2018 I paid stamp duty based on my 40% holding at the prevailing rates as my property was over 250k and was not a first property.

My understaning on my purchase is that the stamp duty is releavant on a shared ownership as with any other property but you should not be paying any as long as the open market value was obtained for the 250k valuation or this is still the first time property.

housebuyer143

stuartp2000 said:

If when you asked to staircase the open market value of the property was accessed and that is 250k then stamp duty is payable at a rate of 0%

If in 2017 you purchased your share and the full value of the property was under 250k than again stamp duty was payable at 0% or this is a first property in which case the threshold is 425K not 250k

When I purchased my 40% share in 2018 I paid stamp duty based on my 40% holding at the prevailing rates as my property was over 250k and was not a first property.

My understaning on my purchase is that the stamp duty is releavant on a shared ownership as with any other property but you should not be paying any as long as the open market value was obtained for the 250k valuation or this is still the first time property.

This is what my sister did. She agreed to pay the full property value stamp duty as property was under £425k they paid nothing, and shouldn't need to laye again when they staircase.