Stamp Duty Land Tax

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Shared ownership property

You may have to pay Stamp Duty Land Tax (SDLT) when you buy a property through a shared ownership scheme run by an approved public body.

This includes:

  • local housing authorities
  • housing associations
  • housing action trusts
  • the Northern Ireland Housing Executive
  • the Commission for the New Towns
  • development corporations

You can choose to either:

  • make a one-off payment based on the market value of the property (바카라 사이트˜market value election바카라 사이트™)
  • pay SDLT in stages

If you바카라 사이트™re a first-time buyer and buying your first share, you may be able to reduce the amount of tax you pay by claiming relief.

Market value election

Submit a return and pay SDLT at the residential rate. Use the total market value of the property to calculate how much to pay - even if you바카라 사이트™re only buying a share.

You do not pay any more SDLT after this, even if you buy a bigger share in the property later on.Ìý

Example

You pay £140,000 to buy a 50% share of a property with a market value of £280,000.

The SDLT you pay will be calculated as follows:

  • 0% on the first £125,000 = £0
  • 2% on the second £125,000 = £2,500
  • 5% on the final £30,000 = £1,500
  • total SDLT = £4,000

HM Revenue and Customs (HMRC) has guidance on how much SDLT you바카라 사이트™ll pay if you do not have the right to the freehold.

Paying in stages

You make your first SDLT payment on the price you pay for the lease (the 바카라 사이트˜lease premium바카라 사이트™) if it바카라 사이트™s above the SDLT threshold for residential rates. If the lease premium is below the threshold, you do not pay SDLT at this point - but you still have to submit a return.Ìý

You may have to pay extra SDLT if the total rent over the life of the lease (known as the 바카라 사이트˜net present value바카라 사이트™) is more than the SDLT threshold.Ìý

Work this out on . You pay SDLT of 1% on the amount over the threshold - add this to any SDLT you바카라 사이트™re paying on the lease premium.Ìý

SDLT if you buy more shares

If you buy any more shares in the property, you do not have to pay any more SDLT or send a return to HMRC until you own more than an 80% share.Ìý 

Once your share of the property goes over 80% you must send a return and pay SDLT on:

  • the transaction that took you over 80%

  • any transactions after that 

Calculating your SDLT

To work out the SDLT if you buy more shares that take you over 80%:

  1. Work out the SDLT due on the total you바카라 사이트™ve paid for the property to date - include any amounts you did not pay tax on. Use the residential rate that applies at the time you bought the new share. For example, if you바카라 사이트™ve paid £260,000 in total so far, the total SDLT due is £3,000 (0% on the first £125,000, 2% on the second £125,000 and 5% on the final £10,000).

  2. Divide the amount you바카라 사이트™re paying for this share by the total amount you바카라 사이트™ve paid for the property to date. For example, if you바카라 사이트™re paying £65,000 for this share, divide £65,000 by £260,000 = 0.25.

  3. Multiply the two figures, for example SDLT of £3000 multiplied by 0.25 = £750. This is the amount you would need to pay in SDLT for this share.

Additional tax if payments are linked

You may have to pay extra SDLT on previous shares if they become 바카라 사이트˜linked바카라 사이트™ to later shares. Shares only become linked once you own over 80% of the property.Ìý

You can read more about how much SDLT you바카라 사이트™ll pay when you buy more shares.

View a printable version of the whole guide

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