Stamp Duty

JHodkin20

Okay so I bought a 50% share of a house back in 2020 for £91,000. It was my first home so no stanp duty was payable.

I have now staircased to 100% ownership, the full house value now is £210,000.

Will I need to pay any stamp duty on this? The government website to try and work this out may as well be in hieroglyphics!

sherlock228

it 100% depends on what you did when your purchased the first 50% and that the property is in ENGLAND, not Wales, Scotland or N Ireland…
I assume your current purchase cost is 50% of 210,000, so you are now paying 105,000?

EITHER - A) you elected (ie got your solicitor to inform HMRC) that you were making a market value election when you originally purchased the first 50% and therefore would pay the SDLT due on the 100% value of the property at that time. Ideally that 100% value meant you would have paid zero since I assume the property was valued at less than the SDLT threshold at that time?

OR - B) you did not make such an election, and therefore must now calculate SDLT on the staircase method

I assume you did B (many FTB are not that well advised when it comes to SDLT on shared ownership) so:

SDLT threshold £125,000

First 50% share. Amount paid 91,000 for 50%. Zero SDLT due as 91 is < 125

Next 50% (which takes you over 80% ownership and therefore triggers paying SDLT if the numbers mean any is due)

amount paid to date 91,000
amount paid on next tranche 105,000

total paid 91+105 = 196,000
SDLT due on amount above threshold
196,000 -125.000 = 71,000 @ 2% = £1,420

adjust for apportionment
1,420 x 91/105 = £1,230.67

assuming B applies, you owe £1,230.67 SDLT

JHodkin20

https://forums.moneysavingexpert.com/discussion/comment/82100976#Comment_82100976

Oh wow thanks for working that out! B sounds correct so I'll assume the stamp duty bull to be around that figure

starboyx

https://forums.moneysavingexpert.com/discussion/6679614/stamp-duty

I think it depends on the amount you paid for the additional share when you staircased. Shared ownership and stamp duty can be a bit confusing, so I’d probably check with HMRC or a solicitor to make sure you’ve got the correct figures. Hopefully someone with experience of staircasing can clarify.

sherlock228

https://forums.moneysavingexpert.com/discussion/comment/82101664#Comment_82101664

LOL read my reply above. Working out staircase SDLT is a not infrequent question on here and the mechanics are relatively straightforward once you learn them.
I have left out the "additional tax" element for simplicity but OP recognises that the figure I show is ball park anyway

Stamp Duty Land Tax: shared ownership property - GOV.UK

SDLT_Geek

https://forums.moneysavingexpert.com/discussion/comment/82100976#Comment_82100976

I agree your method, apart from the apportionment at the end! You have:

"amount paid to date 91,000
amount paid on next tranche 105,000

total paid 91+105 = 196,000
SDLT due on amount above threshold
196,000 -125.000 = 71,000 @ 2 % = £1,420

adjust for apportionment
1,420 x 91/105 = £1,230.67"

I say the "adjust for apportionment" works like this:

£1,420 x 105/196 = £761.

So on my figures that would be SDLT of £761 to pay.

ResourcesShared

Part 2 of this 3-part Shared Ownership Resources feature on shared ownership and Stamp Duty Land Tax might be helpful.

Shared Ownership Stamp Duty: Staircasing