SDLTM29885 - Interaction with Shared ownership – Paying SDLT in Stages

Where the purchaser chooses instead to pay SDLT in stages, the SDLT rates for first-time buyers will apply to the actual consideration (the premium) paid for the initial share purchased. To be eligible for the relief, the market value of the property as referenced in the lease must be £625,000 or less. Where the relief is claimed no SDLT will be payable on the rental payments. The relief applies only to the first transaction, when the lease is granted by the scheme provider.

 Example:

A first-time buyer pays £180,000 (the premium) for a 40% share in a property with a market value of £450,000.

The purchaser decides to pay SDLT in stages. As the market value of the property is below £625,000 the SDLT rates for first-time buyers apply. No SDLT will be due on the £180,000.

SDLT may be due on the rental payments, but as first-time buyers’ relief is being claimed the relief also applies to the rental payments, therefore no SDLT is due on this transaction.