Stamp Duty on Staircasing: Rules and Calculations
If you own a shared ownership property and want to buy a larger share, you may need to pay Stamp Duty Land Tax (SDLT) on the additional share. This is known as staircasing. The SDLT rules for staircasing are different from those that apply when you first buy a shared ownership property. If you chose to pay SDLT in stages when you originally bought your home, you generally do not pay further SDLT until your ownership share exceeds 80%.
If you chose to pay SDLT in stages when you originally bought your shared ownership property, you generally do not pay further SDLT until your ownership share exceeds 80%. Once you buy a share that takes you above 80%, SDLT can become payable and the calculation changes. This guide explains when you pay SDLT when staircasing, how the 80% threshold works, how SDLT is calculated and what happens when you staircase to 100%.
- 80% is the key threshold: If you paid SDLT in stages, further staircasing is generally exempt until your ownership exceeds 80%.
- Check how you paid SDLT originally: A market value election usually means you do not pay SDLT again when you staircase.
- Previous transactions can matter: Once you go above 80%, earlier payments may need to be included in the SDLT calculation.
- You cannot simply use the price of your new share: SDLT above 80% is calculated using the relevant linked transactions and then apportioned to your latest purchase.
- Keep your SDLT records: Your original purchase, previous staircasing transactions and amounts paid can all be important when calculating SDLT.
Do you pay SDLT when staircasing?
Whether you pay SDLT when staircasing depends mainly on how you dealt with SDLT when you first bought your shared ownership property and whether your new purchase takes your ownership above 80%.
There are two broad scenarios:
How you paid SDLT when you bought your first share | What happens when you staircase? |
|---|---|
Market value election | If you paid SDLT based on the property's full market value at the outset, you generally do not pay SDLT again when buying further shares. |
Paid SDLT in stages | Further staircasing transactions are generally exempt while your total ownership remains at 80% or less. SDLT becomes relevant once a transaction takes your ownership above 80%. |
If you are unsure which option you used, check your original SDLT return and purchase paperwork. Your conveyancer can also help establish how the original transaction was treated.
If you made a market value election
A market value election means you chose to pay SDLT based on the property's full market value when you first bought your shared ownership property, rather than paying SDLT in stages.
Once you have paid the SDLT due on the original purchase, you generally do not pay SDLT again when you buy further shares. This means staircasing from 25% to 50%, 75% or 100% will usually not create another SDLT charge.
Expert Tip: Check how SDLT was dealt with when you first bought
Your original SDLT return and purchase paperwork should show how SDLT was dealt with. If you cannot find this information, your conveyancer can help establish how your original purchase was treated.
See our guide on Stamp Duty for Shared Ownership for a fuller explanation of the two ways SDLT can be paid when you first buy a shared ownership property.
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If you paid SDLT in stages
If you did not make a market value election, you dealt with SDLT on the initial purchase and then potentially on later staircasing transactions. The important point is the 80% threshold. Where the shared ownership SDLT rules apply, further staircasing transactions that leave you owning 80% or less are generally exempt from SDLT.
Once a transaction takes your total ownership above 80%, the transaction becomes chargeable under the staircasing rules. Any subsequent staircasing transactions can also be chargeable.
How the 80% SDLT threshold works
The 80% threshold is one of the most important parts of the SDLT rules for staircasing. You can own more than 80% of your home. The 80% figure is simply the point at which the SDLT rules change if you have been paying SDLT in stages.
For example:
Staircasing transaction | Ownership afterwards | SDLT treatment |
|---|---|---|
Initial purchase | 25% | Initial SDLT rules apply |
Buy another 25% | 50% | Generally no further SDLT |
Buy another 25% | 75% | Generally no further SDLT |
Buy another 10% | 85% | SDLT becomes chargeable |
Buy another 15% | 100% | Further SDLT can be chargeable |
So, if you own 75% and buy another 5%, taking you to exactly 80%, that transaction remains within the 80% threshold. If you then buy another 5%, taking your ownership from 80% to 85%, the SDLT rules change.
What happens if one transaction takes you straight from 25% to 85%?
You do not necessarily need to staircase in small increments. If you own 25% and buy a further 60% in a single transaction, bringing your ownership to 85%, the transaction crosses the 80% threshold. SDLT can therefore become payable on that transaction.
The amount of SDLT is not simply calculated on the 5% that takes you from 80% to 85%. The linked transaction rules determine the applicable rate using the total consideration paid for the linked transactions. In other words, you cannot simply calculate SDLT on the price of the extra 5% that takes you over 80%.
How is SDLT calculated when staircasing above 80%?
This is where staircasing SDLT becomes more complicated. When you staircase above 80%, HMRC treats the grant of the shared ownership lease and the relevant staircasing transactions as linked transactions for SDLT purposes.
The total consideration paid for the linked transactions is used to determine the SDLT rate that applies. The SDLT attributable to the current staircasing transaction is then calculated by reference to the amount paid for that transaction.
A simple way to understand the calculation is:
- Add the relevant payments: Work out the total amount paid for the property across the linked transactions.
- Calculate SDLT on that total: Calculate the SDLT that would apply to that total consideration using the relevant rates.
- Work out the SDLT for your latest purchase: Apportion the resulting SDLT to the current staircasing transaction.
This is why you cannot simply take the price of your additional share and put it through the ordinary SDLT calculator.
Example: Staircasing from 25% to 85%
Simon originally bought 25% of his home for £75,000. He did not make a market value election. He later buys another 60% for £180,000, taking his ownership to 85%. Because this purchase takes him above 80%, SDLT becomes payable.
Add what Simon paid
£75,000 + £180,000 = £255,000
Calculate SDLT on £255,000
Using the standard residential SDLT rates:
- £0 on the first £125,000
- £2,500 on the next £125,000
- £250 on the remaining £5,000
Total SDLT = £2,750
Work out the SDLT due on the latest purchase
The latest share cost £180,000 out of the £255,000 total:
£2,750 × (£180,000 ÷ £255,000) = £1,941
So, the SDLT due on the staircasing transaction is approximately £1,941.
Expert Tip: Why this calculation matters
Notice that the SDLT is not calculated simply on the £180,000 additional share using the ordinary SDLT bands. The previous £75,000 payment is relevant because the transactions are linked for SDLT purposes. This is why keeping records of your original purchase and any previous staircasing transactions is important.
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Does the first-time buyer SDLT relief apply when staircasing?
First-time buyer relief does not apply to subsequent staircasing transactions. However, if you claim first-time buyer relief when you bought your original share, you do not lose that relief simply because you later staircase.
This is another reason why the SDLT treatment of your initial purchase and your subsequent staircasing transactions should be considered separately.
What information is needed to calculate staircasing SDLT?
Your conveyancer will need details of your previous transactions to establish how the SDLT rules apply. It is useful to have:
- original purchase date
- original share
- amount paid
- whether you made a market value election
- SDLT paid
- previous staircasing transactions
- dates and amounts
- new share and amount paid
- confirmation of whether you will reach 100% ownership
The more times you have staircased, the more important it is to have a complete record of the previous transactions.
How is SDLT dealt with when you staircase?
Although the exact process depends on your housing association, lease and circumstances, staircasing will generally involve the following stages.
Check your original SDLT treatment
Your conveyancer will first need to establish whether you made a market value election or chose to pay SDLT in stages when you bought your original share.
Check your previous staircasing transactions
If you have bought additional shares before, your conveyancer will need the dates and amounts paid. These transactions may need to be taken into account when calculating the SDLT due.
Calculate the SDLT due
Your conveyancer will work out whether SDLT is due and, where applicable, calculate the amount using the relevant linked transactions and SDLT rates.
Submit the SDLT return
If an SDLT return is required, your conveyancer will normally prepare and submit it to HMRC and arrange payment of any SDLT due.
Complete your staircasing
Once the legal work and SDLT requirements are dealt with, you can complete the purchase of your additional share.
Shared Ownership Specialists
Let us help you with our complete service for shared ownership properties. We have all-inclusive, affordable costs for all the work you need to:
- RICS Valuations
- Staircasing Conveyancing
- Selling or buying a shared ownership property
Our panel solicitors can work with Heylo, or any housing association.
What can go wrong with SDLT when staircasing?
Getting the SDLT calculation wrong can mean paying the wrong amount of tax or delaying your transaction. Common mistakes include:
Assuming you only pay SDLT on the share above 80%
The 80% threshold does not mean you simply pay SDLT on the portion of the property above 80%. Once your ownership exceeds 80%, the SDLT calculation can take into account previous transactions. This means you may need to consider the total consideration for the relevant linked transactions when working out the SDLT due.
Forgetting about previous staircasing transactions
Your previous staircasing transactions can affect the SDLT calculation. If you have bought additional shares in the past, keep a record of the dates, percentages and amounts you paid. Your conveyancer will need this information to establish the correct SDLT position for your latest transaction.
Assuming your SDLT position is the same as your first purchase
The SDLT treatment of your initial shared ownership purchase is not necessarily the same as a later staircasing transaction. For example, if you chose to pay SDLT in stages when you first bought your share, further purchases up to 80% are generally exempt. Once you exceed 80%, however, SDLT may become payable.
Using a standard SDLT calculator for a staircasing transaction
A standard SDLT calculator may not give you the full picture when you're staircasing. The calculation may involve previously linked transactions, and how you originally paid SDLT, so you should not assume that entering the price of your additional share into an ordinary calculator will give you the correct amount.
If you're unsure how much SDLT is due, your conveyancer can check the calculation as part of the staircasing transaction.
Your staircasing stamp duty checklist
Before you staircase, make sure you:
- Check how you paid SDLT on your original shared ownership purchase.
- Check how much of the property you currently own.
- Check whether your new share will take you above 80%.
- Give your conveyancer details of any previous shares you have bought.
- Keep records of what you paid for each share.
- Ask your conveyancer to confirm whether SDLT is due and whether an SDLT return needs to be submitted.
Staircasing your shared ownership home?
Our conveyancing solicitors can help you work out the SDLT position when you staircase, as well as handling the legal work involved in buying your additional share. Reach out for a specialist quote, and we can help you.
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Andrew Boast FMAAT is a qualified accountant, conveyancing specialist and author with over 25 years of experience in the UK property sector. Since beginning his career in 2000 within established SRA and CLC-regulated conveyancing solicitor firms, Andrew has overseen the legal journeys of more than 75,000 clients.
He is the self-published author of the first-time buyer guide: How to Buy a House Without Killing Anyone, and a frequent contributor to mainstream UK media on legislative updates, property law, first-time buyer guides, conveyancing best practices, and stamp duty changes. Andrew specialises in resolving complex title issues, property conflict disputes, and property tax options, streamlining the enquiry process to reduce transaction times and maintaining a client-friendly focus.
Amanda Ambler is a highly accomplished conveyancing specialist with over 15 years of dedicated experience across residential property law, legal compliance, and practice management. Having held senior roles, including Head of Legal Practice and Head of Conveyancing at established UK law firms, Amanda possesses a profound, hands-on understanding of the technical intricacies of the property market.
As the designated Legal Content Reviewer for SAM Conveyancing, Amanda ensures that every guide, legal update, and resource published meets the absolute highest standards of accuracy, regulatory compliance, and factual integrity. Her rigorous review process guarantees that complex property legislation and industry processes are communicated clearly, transparently, and safely for home buyers and sellers alike.
