Stamp Duty Land Tax for Shared Ownership

The stamp duty land tax (SDLT) for shared ownership purchases differs compared to standard purchase and staircasing (read more about stamp duty for staircasing here) as you have 2 different options for paying. You can either pay the stamp duty on the full market value or on the share you are buying. We run through both options below including the pros and cons for both. If you are buying a shared ownership property or staircasing then please call us to get a fixed fee conveyancing quote on 0207 112 5388 or get an instant online quote here.

Do you get 'First Time Buyer Relief' on shared ownership?

First Time Buyer stamp duty relief can only be claimed in respect of the grant of a shared ownership lease or the declaration of a shared ownership trust where “market value” treatment applies. In such a case relief applies as usual to the relevant consideration under that treatment. Where “market value” treatment does not apply or has not been opted for, relief cannot be claimed in respect of any of the transactions involved in shared ownership schemes. This means that if you are only paying the stamp duty on your share, then you cannot claim the stamp duty relief.

Make sure to check your market value because if it is £300,000 or under then you should look to elect to pay the stamp duty on the market value and claim your FTB relief which makes your stamp duty liability nil and also means you don't pay stamp duty when you staircase.

What are the different options to pay SDLT for Shared Ownership?


    Market Value Election - Pay it all in one go

This option is not often used when buying a shared ownership property because it requires you to pay the full amount of the stamp duty land tax liability on the full market price of the property; not just your consideration (your share of the property).

For Example

You buy a leasehold flat worth £350,000 and your share of this is 50% which means the total consideration you pay is £175,000. You have to pay SDLT on the £350,000 which is £7,500 less £5,000 if you are eligible for FTB relief equals £2,500 (that's 0% on £125,000 & 2% on the next £125,000 and then 3% on £100,000) - based on current stamp duty bands - Review these here


  • You don't have to pay any stamp duty when you staircase.
  • If the market value of the property is £500,000 or lower then you can benefit from First Time Buyer relief


  • The additional cost is considerable. Under the other option 'Paying in Stages' the stamp duty you'd pay would be less.
  • You could invest the additional cost, not on stamp duty, but in buying more of a share in the property (meaning you get to own more of your property)

* You should always speak to HMRC if you have a stamp duty query.

We have a specialist shared ownership department so please get in contact if you'd like us to help you with the conveyancing for your shared ownership. Our fees are very competitive and we have fantastic reviews - Call 0333 344 3234 (local call charges apply).

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    Paying in Stages

Most people buying a shared ownership property this will be the most commonly used method to pay your stamp duty; however make sure you don't get caught out in the complexities of the calculation you have to pay if you are buying a new lease (new build).

Stamp duty isn't just calculated on the consideration you pay for your share

You'll need to pay stamp duty land tax on the consideration paid (your share of the property) and, if you have a new lease, the 'net present value' of the rent you pay to the housing association over the full term of your lease.

When working out what stamp duty to pay when paying in stages you'll need to calculate two sums if it is a new lease, or just the consideration on your share, if it is a resale.

    Consideration on your share
The is the simple part of this calculation. You apply the standard rate of stamp duty applicable for the share you own. In the example above, it'd be 50% of £350,000 which is £175,000. The SDLT due on this is £1,000 (that's 0% on £125,000 and 2% on £50,000).

  • This applies to both new build and re-sale shared ownership properties. 

    Net Present Value of rent
This is the complex part of the calculation as you pay 1% stamp duty above £125,000 of the net present value of the rent you pay to the housing association over the full length of your lease (definition of net present value: the value in the present of a sum of money, in contrast to some future value it will have when it has been invested at compound interest).

  • This only applies to new build new leases.

In the example above, if for example the housing association charge 3% of the share they own of £175,000, then the rent is £5,250. If you have a 100 year lease, using the complex net present value formula, the total rent is £147,965 for which you pay £229 stamp duty (that's 0% on £125,000 and 1% on £29,965).

This means the total amount due to pay for stamp duty is £1,000 + £229 which comes to £1,229.

* You should always speak to HMRC if you have a stamp duty query.

How is the rent calculated on the Housing Association's share?

The housing association set the rent based on a percentage of their share of the property; most housing associations charge 3%.

In the example above we saw how on a £350,000 property where you buy 50%, the balance owned by the housing association is £175,000 which means they will charge you an annual fee of £5250 which is £437.50 per month.

Stamp duty on staircasing

Read our second article to find out about – Stamp Duty Land Tax for Staircasing

Which housing associations can you buy a shared ownership through?

  • Local housing authority
  • Housing association
  • Housing action trust
  • Northern Ireland Housing Executive
  • Commission for the New Towns
  • Development corporations

*Fixed Fee – No Sale No Fee – On all Major Lender Panels

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