Staircasing - what threshold applies and am I considered a second time buyer?

MomoB11

Hi all and mostly @SDLT_Geek

Wondered if you could help! 

So I bought a shared ownership property in April 2022 - full value £412,500 (I bought 40% - £165,000). When buying in 2022, my solicitor really didn’t go through the stamp duty in detail so I just assumed I didn’t need to pay. 

I’d like to staircase to 100% in 2026 and in planning ahead, I spoke to a mortgage broker who told me that I’d be considered a second time buyer if I’m staircasing (even though it’s the same first property - something to do with land registry).

Assuming property value stays the same at £412,500 (it’s actually gone down in value this year so I’m hoping by 2026 it’s the same as when I bought it), I would like to staircase
to 100% and buy the remaining 60% - remaining value of which would be £247,500.

Question 1 - what stamp duty am I paying? Am I considered a second time buyer meaning I pay 3% on £247,500 so £7,425 total for stamp duty? OR does the threshold of 0% for the first £250k apply to me as well for staircasing meaning £0? If neither - what is the total amount to anticipate. 

Question 2 - if it is going to cost me £7k - is it better/more cost effective for me to staircase to 80% first and then staircase the 20% again to get to 100%? Dunno how this works out but read in another thread that this might be a good alternative. 

If there is anything else to consider - I’d really appreciate your input massively! Thanks so much!

Have also emailed my solicitors but they haven’t responded. 

HampshireH

https://www.gov.uk/guidance/sdlt-shared-ownership-property

This explains the thresholds

SDLT_Geek

MomoB11 said:

Hi all and mostly @SDLT_Geek

Wondered if you could help! 

So I bought a shared ownership property in April 2022 - full value £412,500 (I bought 40% - £165,000). When buying in 2022, my solicitor really didn’t go through the stamp duty in detail so I just assumed I didn’t need to pay. 
It sounds like the property is in England, so the relevant stamp duty is stamp duty land tax.

The fact that you did not pay any SDLT in 2022 suggests you were a first time buyer in April 2022 and did not elect to pay SDLT on the market value of the property.  That would explain why no SDLT was paid on the initial 40%. 

Am I right?

I’d like to staircase to 100% in 2026 and in planning ahead, I spoke to a mortgage broker who told me that I’d be considered a second time buyer if I’m staircasing (even though it’s the same first property - something to do with land registry).

You are no longer a first time buyer.  But the extra 3% SDLT would not be due if this is your only property.

Assuming property value stays the same at £412,500 (it’s actually gone down in value this year so I’m hoping by 2026 it’s the same as when I bought it), I would like to staircase
to 100% and buy the remaining 60% - remaining value of which would be £247,500.

Question 1 - what stamp duty am I paying?
£4,875, see below.

Am I considered a second time buyer meaning I pay 3% on £247,500 so £7,425 total for stamp duty?
No.

OR does the threshold of 0% for the first £250k apply to me as well for staircasing meaning £0?
No, one has to take account of linked transactions.

If neither - what is the total amount to anticipate. 
£4,875.

Question 2 - if it is going to cost me £7k - is it better/more cost effective for me to staircase to 80% first and then staircase the 20% again to get to 100%? Dunno how this works out but read in another thread that this might be a good alternative. 
Given the amount of SDLT involved, the SDLT saving by taking it in stages might not be worth it.

If there is anything else to consider - I’d really appreciate your input massively! Thanks so much!

Have also emailed my solicitors but they haven’t responded. 

We first work out SDLT at today's rates on the total you will have paid for the property, then take a fraction of that.

You have paid £165,000 + £247,500 = £412,500.

SDLT on £412,500 at standard rates (not a first time buyer, but no 3% extra) is £8,125.

We take a fraction of £8,125.  The fraction is 247,500 / 412,500.

That gives SDLT due on the staircasing out of £4,875.

MomoB11

SDLT_Geek said:

MomoB11 said:

Hi all and mostly @SDLT_Geek

Wondered if you could help! 

So I bought a shared ownership property in April 2022 - full value £412,500 (I bought 40% - £165,000). When buying in 2022, my solicitor really didn’t go through the stamp duty in detail so I just assumed I didn’t need to pay. 
It sounds like the property is in England, so the relevant stamp duty is stamp duty land tax.

The fact that you did not pay any SDLT in 2022 suggests you were a first time buyer in April 2022 and did not elect to pay SDLT on the market value of the property.  That would explain why no SDLT was paid on the initial 40%. 

Am I right?

I’d like to staircase to 100% in 2026 and in planning ahead, I spoke to a mortgage broker who told me that I’d be considered a second time buyer if I’m staircasing (even though it’s the same first property - something to do with land registry).

You are no longer a first time buyer.  But the extra 3% SDLT would not be due if this is your only property.

Assuming property value stays the same at £412,500 (it’s actually gone down in value this year so I’m hoping by 2026 it’s the same as when I bought it), I would like to staircase
to 100% and buy the remaining 60% - remaining value of which would be £247,500.

Question 1 - what stamp duty am I paying?
£4,875, see below.

Am I considered a second time buyer meaning I pay 3% on £247,500 so £7,425 total for stamp duty?
No.

OR does the threshold of 0% for the first £250k apply to me as well for staircasing meaning £0?
No, one has to take account of linked transactions.

If neither - what is the total amount to anticipate. 
£4,875.

Question 2 - if it is going to cost me £7k - is it better/more cost effective for me to staircase to 80% first and then staircase the 20% again to get to 100%? Dunno how this works out but read in another thread that this might be a good alternative. 
Given the amount of SDLT involved, the SDLT saving by taking it in stages might not be worth it.

If there is anything else to consider - I’d really appreciate your input massively! Thanks so much!

Have also emailed my solicitors but they haven’t responded. 

We first work out SDLT at today's rates on the total you will have paid for the property, then take a fraction of that.

You have paid £165,000 + £247,500 = £412,500.

SDLT on £412,500 at standard rates (not a first time buyer, but no 3% extra) is £8,125.

We take a fraction of £8,125.  The fraction is 247,500 / 412,500.

That gives SDLT due on the staircasing out of £4,875.

Omg you’re amazing! Thank you so much - you know what - £4.8k is better than £7.4k - I think I’ll just have to take that 😂

Do you think it would’ve been better to pay stamp duty in 2022 when I first bought the property and if so, how much would I have paid then you reckon?

Also do you reckon it’s best I go straight to 100% - I guess as you say above with legal fees it’s not worth staggering this process. 

again thanks so much - I may have a few more questions if that’s okay…😊

SDLT_Geek

MomoB11 said:

SDLT_Geek said:

MomoB11 said:

Hi all and mostly @SDLT_Geek

Wondered if you could help! 

So I bought a shared ownership property in April 2022 - full value £412,500 (I bought 40% - £165,000). When buying in 2022, my solicitor really didn’t go through the stamp duty in detail so I just assumed I didn’t need to pay. 
It sounds like the property is in England, so the relevant stamp duty is stamp duty land tax.

The fact that you did not pay any SDLT in 2022 suggests you were a first time buyer in April 2022 and did not elect to pay SDLT on the market value of the property.  That would explain why no SDLT was paid on the initial 40%. 

Am I right?

I’d like to staircase to 100% in 2026 and in planning ahead, I spoke to a mortgage broker who told me that I’d be considered a second time buyer if I’m staircasing (even though it’s the same first property - something to do with land registry).

You are no longer a first time buyer.  But the extra 3% SDLT would not be due if this is your only property.

Assuming property value stays the same at £412,500 (it’s actually gone down in value this year so I’m hoping by 2026 it’s the same as when I bought it), I would like to staircase
to 100% and buy the remaining 60% - remaining value of which would be £247,500.

Question 1 - what stamp duty am I paying?
£4,875, see below.

Am I considered a second time buyer meaning I pay 3% on £247,500 so £7,425 total for stamp duty?
No.

OR does the threshold of 0% for the first £250k apply to me as well for staircasing meaning £0?
No, one has to take account of linked transactions.

If neither - what is the total amount to anticipate. 
£4,875.

Question 2 - if it is going to cost me £7k - is it better/more cost effective for me to staircase to 80% first and then staircase the 20% again to get to 100%? Dunno how this works out but read in another thread that this might be a good alternative. 
Given the amount of SDLT involved, the SDLT saving by taking it in stages might not be worth it.

If there is anything else to consider - I’d really appreciate your input massively! Thanks so much!

Have also emailed my solicitors but they haven’t responded. 

We first work out SDLT at today's rates on the total you will have paid for the property, then take a fraction of that.

You have paid £165,000 + £247,500 = £412,500.

SDLT on £412,500 at standard rates (not a first time buyer, but no 3% extra) is £8,125.

We take a fraction of £8,125.  The fraction is 247,500 / 412,500.

That gives SDLT due on the staircasing out of £4,875.

Omg you’re amazing! Thank you so much - you know what - £4.8k is better than £7.4k - I think I’ll just have to take that 😂

Do you think it would’ve been better to pay stamp duty in 2022 when I first bought the property and if so, how much would I have paid then you reckon?
Assuming you would have qualified as a first time buyer, the SDLT on the market value in 2022 would have been £5,625.

Also do you reckon it’s best I go straight to 100% - I guess as you say above with legal fees it’s not worth staggering this process. 
If nothing changes, in terms of values or SDLT rules, then the SDLT on taking it in stages, up to 80%, then the last 20%, would be 20% of £8,125.  That is £1,625.  But:
   SDLT thresholds are due to fall from 01.04.2025, that would mean more SDLT.
   Values are likely to change.
   There are legal fees and the time involved.

again thanks so much - I may have a few more questions if that’s okay…😊

I hope this helps.

MomoB11

SDLT_Geek said:

MomoB11 said:

SDLT_Geek said:

MomoB11 said:

Hi all and mostly @SDLT_Geek

Wondered if you could help! 

So I bought a shared ownership property in April 2022 - full value £412,500 (I bought 40% - £165,000). When buying in 2022, my solicitor really didn’t go through the stamp duty in detail so I just assumed I didn’t need to pay. 
It sounds like the property is in England, so the relevant stamp duty is stamp duty land tax.

The fact that you did not pay any SDLT in 2022 suggests you were a first time buyer in April 2022 and did not elect to pay SDLT on the market value of the property.  That would explain why no SDLT was paid on the initial 40%. 

Am I right?

I’d like to staircase to 100% in 2026 and in planning ahead, I spoke to a mortgage broker who told me that I’d be considered a second time buyer if I’m staircasing (even though it’s the same first property - something to do with land registry).

You are no longer a first time buyer.  But the extra 3% SDLT would not be due if this is your only property.

Assuming property value stays the same at £412,500 (it’s actually gone down in value this year so I’m hoping by 2026 it’s the same as when I bought it), I would like to staircase
to 100% and buy the remaining 60% - remaining value of which would be £247,500.

Question 1 - what stamp duty am I paying?
£4,875, see below.

Am I considered a second time buyer meaning I pay 3% on £247,500 so £7,425 total for stamp duty?
No.

OR does the threshold of 0% for the first £250k apply to me as well for staircasing meaning £0?
No, one has to take account of linked transactions.

If neither - what is the total amount to anticipate. 
£4,875.

Question 2 - if it is going to cost me £7k - is it better/more cost effective for me to staircase to 80% first and then staircase the 20% again to get to 100%? Dunno how this works out but read in another thread that this might be a good alternative. 
Given the amount of SDLT involved, the SDLT saving by taking it in stages might not be worth it.

If there is anything else to consider - I’d really appreciate your input massively! Thanks so much!

Have also emailed my solicitors but they haven’t responded. 

We first work out SDLT at today's rates on the total you will have paid for the property, then take a fraction of that.

You have paid £165,000 + £247,500 = £412,500.

SDLT on £412,500 at standard rates (not a first time buyer, but no 3% extra) is £8,125.

We take a fraction of £8,125.  The fraction is 247,500 / 412,500.

That gives SDLT due on the staircasing out of £4,875.

Omg you’re amazing! Thank you so much - you know what - £4.8k is better than £7.4k - I think I’ll just have to take that 😂

Do you think it would’ve been better to pay stamp duty in 2022 when I first bought the property and if so, how much would I have paid then you reckon?
Assuming you would have qualified as a first time buyer, the SDLT on the market value in 2022 would have been £5,625.

Also do you reckon it’s best I go straight to 100% - I guess as you say above with legal fees it’s not worth staggering this process. 
If nothing changes, in terms of values or SDLT rules, then the SDLT on taking it in stages, up to 80%, then the last 20%, would be 20% of £8,125.  That is £1,625.  But:
   SDLT thresholds are due to fall from 01.04.2025, that would mean more SDLT.
   Values are likely to change.
   There are legal fees and the time involved.

again thanks so much - I may have a few more questions if that’s okay…😊

I hope this helps.

Ohhhh that’s interesting that the threshold are going to fall in 2025. That’s bad news for meeee  😭

Cloudx12

I had email from HMLR and said that it is not their policy to enter reference of staircasing in the title register and nor would be required.

(Note: I have my 100% Mortgage Deed Copy) as I am became the sole Proprietor of the flat I bought from A2 Dominion. My previous solicitor applied for a charge AP1 as a Whole for Title.

Has anyone or your solicitor applied for an Update of  Title Deed to enter  100% Memorandum of Staircasing.