Stamp Duty is a tax you might have to pay when buying a residential property in England or Northern Ireland for over £250,000. Shared Ownership homes offer the exciting chance to secure a share in a property, with the ultimate goal of gradually acquiring additional shares until complete ownership is achieved. But how does Stamp duty work with Shared Ownership?
A great benefit of Shared Ownership is that it gives buyers options. You have a choice of whether to pay Stamp Duty on the full value of the property or just the share that you’re purchasing. There are advantages and disadvantages to both options. Paying Stamp duty on the share allows buyers to lower the initial cost of purchase however the overall cost may be higher when you purchase 80% or more of the property. Paying Stamp duty on the full value of the property means you never have to worry about Stamp Duty again leaving buyers to enjoy their fantastic new homes, but the downside is the costs will likely be higher. If you have already purchased your property and chose not to pay the full Stamp Duty at the start, then you will not be liable to pay more Stamp Duty until you purchase an 80% share of your home through Staircasing.
The decision ultimately rests in your hands. As you embark on your property ownership journey, be it through Shared Ownership, SO Flexi or MyResi having clarity on Stamp Duty will undoubtedly empower your choices and guide you towards fulfilling your dream of owning your own home.
You can find more information on the Government website as well as a short guide on ShareToBuy.
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Written by the SO Resi In-House Team