Buying a shared ownership home can make it easier to step onto the property ladder. But when it comes to stamp duty on shared ownership, many buyers feel confused. Should you pay it upfront or only when you start the staircase? Does the 2025 change affect how much you pay?
In this guide, we’ll walk you through how Stamp Duty Land Tax (SDLT) works on shared ownership homes, what’s changed in 2025, and how it could affect your plans.
How does Stamp Duty work on shared ownership?
A shared ownership property is part-owned and part-rented, often through a housing association. You start by buying a share, usually between 25% and 75%, and pay rent on the remaining portion.
When it comes to SDLT, you typically have two options:
- Pay stamp duty on shared ownership based on the share you buy
- Pay it on the full market value of the property upfront
The choice you make can affect both your initial costs and what you may owe if you staircase later. This often depends on how the scheme is structured. Therefore, it’s helpful to begin by understanding shared ownership and how these agreements typically operate.
What are the 2025 Stamp Duty changes?
From April 2025, the government ended the temporary stamp duty relief that applied to shared ownership homes under a specific threshold.
Previously, first-time buyers could benefit from a full exemption if their home’s market value was under £300,000. This included both the shares they bought and the rent-paying portion. But this stamp duty on shared ownership relief won’t be extended beyond the deadline.
From 2025 onward:
- SDLT is due either on the full market value or
- On the portion purchased, with more due later if you staircase
That means planning how you pay becomes even more important for shared ownership buyers.
How the changes affect shared ownership buyers
Do you need to pay stamp duty on shared ownership if you only purchase a small share? The answer depends on the payment option you choose at the time of purchase.
You still have two routes:
- Pay SDLT only on the share you buy now. Then, if you increase your ownership later (through staircasing), you’ll pay SDLT again at that point.
- Choose to pay upfront on the home’s full market value. This may cost more now, but it avoids additional SDLT when you staircase.
To make an informed decision, many buyers use online tools to calculate stamp duty on shared ownership and weigh up the pros and cons of each payment route. Because the rules can be complex, consulting with a broker can provide clarity tailored to your specific situation. You can also explore different shared ownership mortgage options to see what suits your budget and long-term goals.
Paying SDLT on the initial share you purchase
One of the most common choices is to pay stamp duty on shared ownership based only on the first share you buy. This is called the ‘partial SDLT election’.
For example, if you buy a 40% share in a home worth £250,000, your SDLT is calculated on just that 40% value. You don’t need to pay stamp duty on the remaining 60% unless you decide to staircase in the future.
This approach works well if:
- You want to keep upfront costs low
- You are unsure when (or if) you’ll staircase
- The full market value is close to or above the SDLT threshold
However, if you later increase your share to over 80%, you will likely owe SDLT on those additional shares. This is when stamp duty on shared ownership staircasing becomes important.
Paying SDLT on the full market value
Another route is to pay SDLT upfront based on the full value of the property, even though you’re only buying a part of it. This is called a ‘market value election’.
Using the same example above, if the home is worth £250,000, you pay SDLT on the full price, not just the 40% share.
Why would someone choose this option?
- It means you won’t need to pay SDLT again, even if you staircase to 100%
- It can offer peace of mind if you know you’ll want full ownership later
But it does come with higher upfront costs. Therefore, it’s essential to do the math or consult an adviser before choosing this route.
Stamp Duty and staircasing explained
Staircasing is when you buy more shares in your shared ownership property, getting you closer to full ownership.
When your total ownership rises above 80%, stamp duty on shared ownership staircasing applies again, unless you paid SDLT upfront on the full market value.
So, do you pay stamp duty on shared ownership each time you staircase? Not always. You only pay when:
- You go above the 80% ownership mark
- You didn’t pay SDLT on the full value initially
Let’s say you started with 40% and staircased to 75%. You wouldn’t owe extra SDLT at that point. But if you later bought another 10%, taking you to 85%, then the stamp duty on shared ownership staircasing kicks in.
This is where many buyers get caught out. They didn’t expect a tax bill years later. That’s why choosing the right SDLT route from the beginning can help you plan more confidently.
Speak to a broker to understand your stamp duty options
Deciding how to handle stamp duty on shared ownership can be confusing if you’re considering buying more shares later. That’s where a broker can help. They’ll assess your entire situation, including your income, deposit, and long-term plans, and explain which SDLT route works best for you.
They can also help you:
- Calculate the stamp duty on shared ownership based on your chosen share and property value
- Understand when the stamp duty on shared ownership staircasing will apply
- Choose between paying the share or the full market value
Final thoughts: plan now to avoid surprises later
Many first-time buyers wonder if they need to pay stamp duty on shared ownership more than once. The answer depends on how much they buy now and how much they plan to buy later.
If you choose to pay SDLT only on your initial share, be aware that stamp duty on shared ownership staircasing may apply later if you purchase more shares. On the other hand, paying upfront on the full value means you won’t face more SDLT in the future, but the cost will be higher at the start.
That’s why it’s so important to calculate stamp duty on shared ownership before making a decision. Knowing your numbers gives you better control over your budget and your future plans.