SDLTM29880 - Interaction with Shared ownership - Market Value Election

Where a market value election is made, the SDLT rates for first-time buyers apply to the relevant consideration under that treatment. Where the relief is claimed, no SDLT will be due on any rent paid under the lease.

 Example:

A first-time buyer pays £225,000 for a 50% share in a shared ownership property with a market value of £450,000.

A market value election is made, with SDLT being due on the total market value of £450,000. As the relevant consideration (i.e. the market value of the property) is below £625,000 first-time buyers’ relief can be claimed.

If relief is claimed, the purchaser will pay SDLT at 0% on the first £425,000 and 5% on the remaining £25,000, paying a total of £1,250 in SDLT. No further SDLT will be due on any further shares purchased or if the buyer goes on to purchase the property outright. No SDLT is payable on the rental payments.