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You may have to pay Stamp Duty Land Tax (SDLT) when you buy a property through a shared ownership scheme run by an approved public body.

This includes:

• local housing authorities
• housing associations
• housing action trusts
• the Northern Ireland Housing Executive
• the Commission for the New Towns
• development corporations

You can choose to either:

• make a one-off payment based on the market value of the property (鈥榤arket value election鈥�)
• pay SDLT in stages

Market value election

Submit a return and pay SDLT at the residential rate. Use the total market value of the property to calculate how much to pay - even if you鈥檙e only buying a share.

You do not pay any more SDLT after this, even if you buy a bigger share in the property later on.听

HM Revenue and Customs (HMRC) has guidance on how much SDLT you鈥檒l pay if you do not have the right to the freehold.

Paying in stages

You make your first SDLT payment on the price you pay for the lease (the 鈥榣ease premium鈥�) if it鈥檚 above the SDLT threshold for residential rates. If the lease premium is below the threshold, you do not pay SDLT at this point - but you still have to submit a return.听

You may have to pay extra SDLT if the total rent over the life of the lease (known as the 鈥榥et present value鈥�) is more than the SDLT threshold.听

Work this out on . You pay SDLT of 1% on the amount over the threshold - add this to any SDLT you鈥檙e paying on the lease premium.听

SDLT if you buy more shares

If you buy any more shares in the property, you do not have to pay any more SDLT or send a return to HMRC until you own more than an 80% share.听聽

Once your share of the property goes over 80% you must send a return and pay SDLT on:

• the transaction that took you over 80%

• any transactions after that聽

Calculating your SDLT

To work out the SDLT if you buy more shares that take you over 80%:

1. Work out the SDLT due on the total you鈥檝e paid for the property to date - include any amounts you did not pay tax on. Use the residential rate that applies at the time you bought the new share. For example, if you鈥檝e paid 拢260,000 in total so far, the total SDLT due is 拢3,000 (0% on the first 拢125,000, 2% on the second 拢125,000 and 5% on the final 拢10,000).

2. Divide the amount you鈥檙e paying for this share by the total amount you鈥檝e paid for the property to date. For example, if you鈥檙e paying 拢65,000 for this share, divide 拢65,000 by 拢260,000 = 0.25.

3. Multiply the two figures, for example SDLT of 拢3000 multiplied by 0.25 = 拢750. This is the amount you would need to pay in SDLT for this share.

Additional tax if payments are linked

You may have to pay extra SDLT on previous shares if they become 鈥榣inked鈥� to later shares. Shares only become linked once you own over 80% of the property.听