How much to staircase?

keef83

Hi everyone, my wife and I have been in our part buy part rent for 7 years and with our mortgage due for renewal this year we hoped to by the remaining 50% of the property. 

We've had the valuation completed and understand how much more we'd need to mortgage but I'm wondering if there is benefit in only going to an 80% share rather than 100% share after reading some other threads that suggested staircasing to 80% didn't incur and SDLT, maybe I've miss understood (quite likely).

We originally brought our 50% for £165k, the valuation is £395k leaving us an additional purchase value of £230k. We paid stamp duty when we first brought our 50% but a calculation on the HMRC site today suggested we'd need to pay £13.6k in Stamp duty and land tax.

We're in England, but really not sure what is best to do, I can't believe the calculation from HMRC is correct (I hope not). 

Thanks in advance for support / advice.

SDLT_Geek

keef83 said:

Hi everyone, my wife and I have been in our part buy part rent for 7 years and with our mortgage due for renewal this year we hoped to by the remaining 50% of the property. 

We've had the valuation completed and understand how much more we'd need to mortgage but I'm wondering if there is benefit in only going to an 80% share rather than 100% share after reading some other threads that suggested staircasing to 80% didn't incur and SDLT, maybe I've miss understood (quite likely).

We originally brought our 50% for £165k, the valuation is £395k leaving us an additional purchase value of £230k. We paid stamp duty when we first brought our 50% but a calculation on the HMRC site today suggested we'd need to pay £13.6k in Stamp duty and land tax.

We're in England, but really not sure what is best to do, I can't believe the calculation from HMRC is correct (I hope not). 

Thanks in advance for support / advice.

I wonder how you got to SDLT of £13,600?  Even buying the whole property now for £395,000 would only cost SDLT of £9,750 at standard rates!

A good start would be to say what date you bought the property and how much SDLT you paid on the £165,000 for the 50% share.  This might help, for example:

(a)  If you paid SDLT of £6,500, that would indicate that the market value election was made and no more SDLT will be due on staircasing out.

(b)  If you paid SDLT of £800, that would indicate that SDLT was only paid on the £165,000 and there would be some more SDLT to pay if you staircase to over 80%.

keef83

Sorry re ran my SDLT and got a much healthier number I think that I selected that I was a business as miss read one of the questions 😔