My SO Home: No. 40

“I was confused by stamp duty land tax (SDLT) so I asked Chat GPT to calculate my SDLT for staircasing to 100%.”

I’d been living with family, but I wanted a space of my own

I bought a 50% share in a flat in 2017. I wasn’t necessarily looking for a place to buy at the time. But I’d been living with my sister for a while and was saving money, then immediately spending it on travel trips.

I recall seeing an advert for a shared ownership development, which was initially showing on the location map as two streets from my current house. I found out at the viewing, it was actually about 17 streets away! To be honest, I guess I didn’t really understand shared ownership at the time. I saw the deposit was fairly achievable, a modest £8k or so… which I had. So I thought, hell why not! It was time to move on and I liked the idea of having my own space.

My shared ownership flat ticked lots of boxes

What made me choose this particular property? Solid block walls! I couldn’t bear the thought of stud walls, they’re truly awful.

I always knew that a two-bed was the minimum I’d consider. If you buy anything less, you have no leverage if things get tough. At least with a two-bed, you have the option to rent out a bedroom.

Family close by, transport links, the area seemed to be on the up. I recall HS2 was going to be passing through my local station, so I immediately saw the dollar signs… Combined with the newly arrived Costa Coffee. (Not quite Gails, but we all have to start somewhere!).

It’s a small development, four houses and eight flats. That appealed as it would be more manageable from an anti-social behaviour (ASB) perspective, and service charge would be cheaper than a larger development. Also the flat came with a 125-year lease.

With hindsight, I wish I’d bought a bigger share

My mortgage broker said could I afford 66%. But I didn’t want to over-commit financially. I was fearful about not meeting the payments, and decided on a 50% share. Although, in retrospect, I should have listened to him.

The monthly rent was affordable to start with, and I was happy paying it. However, it started creeping up. Over time, my rent went from around £290 a month, to the £500’s. I I just thought, this is madness, so I staircased by 25% to a 75% share in 2023.

I didn’t want to go to an 80% share, because of the Stamp Duty Land Tax (SDLT) implications. Also, I’ve always thought of anything around 60-80% as a ‘danger zone’. You can’t really sell it on as it’s unaffordable to new buyers – those who it’s aimed at; yet it’s not quite 100%, so not attractive to a prospective leaseholder. It’s a deadlock.

Staircasing to 100%

In 2026 I staircased by 25% to 100%, and mostly because I like the idea of being able to rent out. I cannot stand my housing association. So the freedom excites me. Fortunately for me, the property was still valued the same as in 2023 so I paid the same for the final 25% share as the previous 25% share.

But the experience of staircasing was ugh…. Incompetence, delays, SDLT costs, multiple fees for RICS valuations, and then more delays. I ended up paying for a RICS valuation twice and my initial mortgage offer expiring, largely down to solicitors. The solicitors recommended by the housing association, I might add.

With hindsight, I wish I’d bought a bigger share at the outset

Knowing what I know now, I’d have gone straight in at 66% then staircased to 100% on the first staircasing transaction.

No-one told me I’d lose first time buyer status for stamp duty after buying my first share

I didn’t, and still don’t fully, understand SDLT. It’s been hard to get an answer from anyone. I asked Chat GPT about SDLT on staircasing to 100%. But the calculation seemed widely inaccurate and left me with a best and worst case scenario. Chat GPT said I’d either be paying £5,400 or £1,700, which makes a big difference. As it is, I’ve only just been able to get to 100% by the skin of my teeth.

I’m still confused by SDLT. I didn’t understand the options when I bought my first share, and I still don’t understand what a ‘market value election’ is, even to this day. I don’t have any record of opting in or out of it. In the end I had to reach out to Shared Ownership Resources for information on SDLT and staircasing to 100%.

Shared ownership pros and cons

There are pros to shared ownership. It’s accessible if you don’t have a lot of wealth. I have two friends who managed to start off in shared ownership and then sell and buy houses, which is inspiring. Although they got on the ladder back when it was cheaper. 

Also, shared ownership homes are usually new-builds, so there’s not so much need to invest in repairs.

On the other hand, it can be confusing, and there are double costs. You pay so much in fees every time you staircase. In retrospect, that’s not the best approach.

That said, I don’t have the luxury of the bank of mum and dad, so what options are there for people like me? If you embark into shared ownership you need a strategic plan to either get to 100% or stay below 55%/60% and get out.

What it cost me to get to 100%

Featured image: karlyukav on Magnific

Additional Resources

HMRC: Stamp duty land tax: Shared ownership property

Shared Ownership Resources: Shared ownership stamp duty: staircasing