Shared ownership and stamp duty

Beautifulsnails2

Hi, I hope someone can help.

I bought out my shared ownership flat and now run it as a buy to let with housing association consent. 

I married in 2024 and my husband also has a flat, which is shared ownership (40%). 

We would like to buy out the remaining shared ownership portion jointly.  I can put down £10K to support any additional borrowing. The current mortgage expires in 2027. 

 If we did this would he still have first time buyer relief? As he was the original purchaser. 

 What effect would I have being on the title deeds as a second time home owner?

Could we borrow additional funds (from our current lender) without having me on the title deeds, but listing my income?

 Would we need to pay stamp duty if the property is over the threshold?

Would this count as a second home? 

Thanks 

ResourcesShared

Your husband won't still have first time buyer relief as this only applies to the initial share. You'll probably benefit from calling the HMRC SDLT Helpline for your other questions. And you might also want to take a look at Shared Ownership Resources, which has some useful articles on SO and SDLT.

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/stamp-duty-land-tax

SDLT_Geek

Beautifulsnails2 said:

Hi, I hope someone can help.

I bought out my shared ownership flat and now run it as a buy to let with housing association consent. 

I married in 2024 and my husband also has a flat, which is shared ownership (40%). 

We would like to buy out the remaining shared ownership portion jointly.  I can put down £10K to support any additional borrowing. The current mortgage expires in 2027. 

 If we did this would he still have first time buyer relief? As he was the original purchaser. 

 What effect would I have being on the title deeds as a second time home owner?

Could we borrow additional funds (from our current lender) without having me on the title deeds, but listing my income?

 Would we need to pay stamp duty if the property is over the threshold?

Would this count as a second home? 

Thanks 

Is the property in England, so that the relevant stamp duty is stamp duty land tax?  I assume so, given the reference to first time buyers' relief.

I agree with @ResourcesShared that first time buyers relief will not be available on buying out the remaining share.

Potentially the extra 5% SDLT could apply because of you owning another property.  But a special rule could save the day there, if your husband has been living in his flat as his only or main residence throughout the last three years.  There is guidance on that here: https://www.gov.uk/hmrc-internal-manuals/stamp-duty-land-tax-manual/sdltm09814

Beautifulsnails2

Thank you both this is really helpful! 

Beautifulsnails2

Hi- we received the valuation at  long last £475k full market value. 

He’s lived in the property since purchased (under three years ago).

please can you help work out the stamp duty due?

Thanks!

SDLT_Geek

Beautifulsnails2 said:

Hi- we received the valuation at  long last £475k full market value. 

He’s lived in the property since purchased (under three years ago).

please can you help work out the stamp duty due?

Thanks!

So his property is in England?

How much did he pay for the original 40% share?  Did he buy that in "one go", taking a new lease from the social landlord?

He did not elect (if buying direct from the social landlord) to pay all of the SDLT in one go at the time of the purchase?

He would now have to pay the social landlord 60% of £475,000 which is £285,000?

Beautifulsnails2

Hi- yes, the property is in England. 

Paid £172k for 40% paid on one go. No election was made! 

Yes £285k. Total property not £475k. 

SDLT_Geek

Beautifulsnails2 said:

Hi- yes, the property is in England. 

Paid £172k for 40% paid on one go. No election was made! 

Yes £285k. Total property not £475k. 

I make the SDLT on buying out to 100% £20,705, as explained below.

The total amount he has paid is £172K + £285K = £457,000.

We work out the SDLT on the £457,000 applying the extra 5% (because you own another property).  That gives SDLT of £33,200.  (It would be £2,500 more if completion is delayed to after 31 March 2025.)

The SDLT payable is a fraction of £33,200.  The fraction is £285K / £457K.  That gives SDLT due of £20,705.

Beautifulsnails2

Thank you! 

Beautifulsnails2

Out of interest what would SDLT be if I didn’t own a second property? I know you can claim it back if sold within three years, right?!

Finally, do you think the government will stick with this new SDLT threshold or do you think there will be a U turn?  Sure the property industry would rather see more sales than less due to stamp duty?