Your options for paying Stamp Duty
When you purchase a home with Shared Ownership you'll have two options for paying your Stamp Duty - you can either pay it in full, or in stages. Your solicitor should cover both options in more detail during the buying process to help you work out which option is best for you, here’s a rough idea how the options work:
One-off payment
Pay the stamp duty on the full value of the property as if you were buying it outright, this is known as ‘market value election’.
- If your property’s full market value is below your stamp duty threshold you won’t need to pay stamp duty now, or in the future.
- If your property’s full market value is above your stamp duty threshold you will pay the relevant sum, increasing the initial costs to purchase your home. However, you won’t have to pay stamp duty on the property again - even if you go on to buy it outright in the future at a higher market value.
Pay in stages
Pay the stamp duty owed on the share of the home you are initially purchasing. You then don’t make any further stamp duty payments until you own more than 80% of your home via the staircasing process, at which point any outstanding balance would be due.
This could be useful in situations where the full market value of the property is above the threshold for paying stamp duty, as it can take your share back below the threshold, reducing your upfront costs.
It’s also worth noting that you will not need to pay any additional stamp duty on your property if you choose not to staircase, or do not increase your share above 80%.
For further guidance, speak to your solicitor or visit the government website.