Stamp Duty Land Tax on Shared Ownership Property / Staircasing
Shared-ownership purchases makes home ownership a more affordable and viable option because you can part buy and part rent your home. It is an option that is appealing to a wider variety of purchasers.
A shared ownership agreement allows you to pay rent on the share of the property that you do not buy outright. We can assist in purchasing a 25%, 50% or 75% share in your new home. In effect, the larger the share you purchase the less rent you pay on the share you do not own.
As you can imagine there are stamp duty implications you must be aware of before you proceed with your purchase.
Upon finalising the purchase, you can elect to pay the full Stamp Duty Land Tax (SDLT) at the outset on the full market value of the property. In this instance there will be no further stamp duty charges applicable.
There is a special SDLT relief option which means Staircasing payments are not charged SDLT until the purchaser owns an 80% of the share in the freehold. Staircasing is a process in which the owner is able to buy further shares of the freehold title-this could be as little as 10% at a time.
In respect of the SDLT payments-any payment made over the 80% threshold will immediately attract stamp duty land tax.Example
|Full Market Value of the Property:||₤250,000.00|
|Shared Ownership Purchase (50% share) No Stamp Duty payable||₤125,000.00|
|First Staircasing Payment (25%) This first payment will not attract stamp duty as the owner does not own at least 80% of the freehold.||₤62,500.00|
|Second Staircasing Payment (25%)This second payment, means the purchaser will now own 100% of the property therefore incurs SDLT on the full market value of ₤250,000.00.||₤62,500.00|
If you are purchasing a shared ownership property and have any questions relating to the Stamp Duty Land Tax (SDLT) Implications please feel free to contact us for advice
Client satisfaction is critically important to us. We want you to be delighted with our service and recommend us. At the end of each transaction our clients are invited to review our performance on the independent Feefo customer review web site. We always obtain consistently high feedback. To see what our clients are saying about us please click here:-
Our quotes provide an accurate breakdown of our fees, CHAPS fees, stamp duty, Land Registry Fees, Identification verification. If there is any part of the quote that you do not fully understand please feel free to telephone or email us. We are always happy to help.
At Conveyancing Warehouse we take great pride not only in our service but in providing conveyancing quotes that are hard to beat.