Shared ownership - staircasing from 50%>80%>100%

nasca07

Hello,

I am looking for experiences with staircasing in two steps to reduce stamp duty.

I currently own 50% of a flat in London and am planning to increase my share to 80%, then immediately staircase to 100%.

I paid 0 SDLT when I completed the initial 50% purchase. As far as I understand, only the transaction that takes me above 80% should trigger stamp duty. I have run the numbers and, despite higher solicitor and admin fees, there are still significant savings in splitting the staircasing into two steps (50% > 80% > 100%) rather than doing it all in one go 50% > 100%.

There are a 2 points I am trying to clarify:

1)
When I do the first step from 50% to 80%, what is usually the best approach from a mortgage perspective?

Should I approach my existing lender to increase the amount borrowed to reach 80%?

Once I move from 80% to 100%, would it make sense to shop around for the best mortgage deal at that point?

Given that my end goal is to reach full ownership as quickly as possible once I start staircasing in two steps, I am also wondering whether it is possible to initiate the mortgage application with my initial goal from the beginning.

2)
The valuation is valid for 3 months. If I manage to complete the 50% to 80% staircasing within that period, can I reuse the same valuation to immediately staircase from 80% to 100%?

Can staircasing transactions be done back to back, or is there any "cooling-off" period between steps that I should be aware of?

Any other consideration?

Thank you in advance for any advice.

EssexHebridean

This is one for @SDLT_Geek I think, but I would suggest that you might confirm what election you made on the stamp duty when you purchased. You say you paid zero, but was that just the SDLT payable on the 50% share, and perhaps with First Time Buyer relief applied, or was that based on the full value of 100% of the property value? If the latter, then there should not be further SDLT to pay on staircasing although once past the 80% level a form still needs to be submitted regardless. 

On the question of how staircasing itself works for your property, your lease is your friend - there should be a clause confirming if you can staircase, to what percentage you can staircase, and how the process works. If you are looking to go right to the 100% stage though, I’m not sure what the benefit of doing it in two stages back to back would be - you will have to pay two lots of legal fees, and very possibly two fees to the lender if it would require further borrowing.