Shared ownership resale - SDLT

dp186

Hi, I'm researching costs of getting a Shared Ownership resale as a first time buyer. I can't work out if you pay stamp duty on the full market value, or just the value of your share. The sources I've found say you don't have the same options as when buying a new build SO, but don't say exactly how it is worked out (gov.uk does not mention resales).

For context, I'm looking at buying 35% share of a £525,000 full magnet value property.

Anyone have any experience with this? @SDLT_Geek ? (I was told to mention you, hope you don't mind & thanks in advance)

Thanks, Dominic

Altior

HMRC SDLT: Understanding SDLT Market Value Election for Shared Ownership and First-Time Buyers’ Relief – Land Tax Advice

dp186

Thanks for your reply @Altior. This is the above that is relevant for new builds. When buying a resale you don't have the option to pay in stages. I have read an article that suggests you only pay SDLT on the share that you buy, but I have seen elsewhere that you pay based on the full market rate (can't post link as I'm still a newbie). 

Altior

dp186 said:

Thanks for your reply @Altior. This is the above that is relevant for new builds. When buying a resale you don't have the option to pay in stages. I have read an article that suggests you only pay SDLT on the share that you buy, but I have seen elsewhere that you pay based on the full market rate (can't post link as I'm still a newbie). 

You're right, I should learn to read a post properly when responding! I had experience of market value election, but on a new build.

SDLT for a shared ownership re-sale property

When purchasing a shared ownership re-sale property (ie an existing non-new build) SDLT is simply paid on the usual rates for the actual price being paid for the property.  The rent payable for the property is not relevant for SDLT purposes and neither is the FMV.

The only other consideration is to establish whether the first buyer of the property paid on the share and the rent or made a full market value election.  If they only paid on the share and rent, this means that SDLT will be payable once a future owner staircases over 80% ownership.  If the first buyer originally paid SDLT on the FMV, a future owner will benefit from not having to pay any SDLT for any subsequent staircasing transaction if they can evidence this.

Stamp Duty on shared ownership property explained

SDLT_Geek

dp186 said:

Hi, I'm researching costs of getting a Shared Ownership resale as a first time buyer. I can't work out if you pay stamp duty on the full market value, or just the value of your share. The sources I've found say you don't have the same options as when buying a new build SO, but don't say exactly how it is worked out (gov.uk does not mention resales).

For context, I'm looking at buying 35% share of a £525,000 full magnet value property.

Anyone have any experience with this? @SDLT_Geek ? (I was told to mention you, hope you don't mind & thanks in advance)

Thanks, Dominic

The text @altior has provided is helpful.

You will be taking an assignment of an existing lease, so the SDLT is due as in an ordinary purchase (with no possibility of making a market value election).

First time buyers’ relief can still apply.  If you are paying £183,750 (35% of £525,000) that would mean no SDLT on the purchase.

Should you ever staircase to over 80% then further SDLT could be due.  You should find out whether the person who took the grant of the lease in the first place elected to pay SDLT on market value. If they did, then you would not have to pay SDLT should you staircase over 80%.