Shared Ownership of New Build Properties

Our specialist new build property team have vast experience in acting on behalf of new build purchasers and shared ownership schemes. Unlike many law firms, we have a specialist department that deals exclusively with new build and shared ownership transactions.

What Is Shared Ownership?

Shared ownership provides the opportunity to purchase a share in a property, usually between 25% and 75%. You will pay a mortgage on the share that you own and pay a subsidised rent to a housing association on the remaining share. As you will only need a mortgage on the share that you are purchasing, the amount of money required for a deposit is usually a lot lower than if you were to buy outright.

As and when you can afford to, you can usually buy further shares in the property until you own 100%. This is known as ‘staircasing’.

Selling a Shared Ownership Property

If you own a share in a property, you are not free to sell it as you would a normal property. The Housing Association involved has the right to nominate the buyer.

There are usually two pays to sell a shared ownership property:

  1. By selling the share that you own
  2. By buying the remaining share of the property and then selling the property as a whole.

Stamp Duty Land Tax on Shared Ownership Properties

You will not need to pay SDLT on a shared ownership property unless the value of the share that you are buying exceeds that at which SDLT becomes payable. This is currently £125,000.

You can elect to pay SDLT on the full market value of the property. You may choose this option as if you staircase up to in excess of 80%, you will need to pay SDLT. When you staircase to 80%, the full value of the property may have increased, meaning you would be paying more SDLT than if you had paid at the start.

Subletting a Shared Ownership property

Shared ownership leases do not allow you to sublet the property. You are required to live in your home as your main residence as it is a government funded scheme intended to help people to own their own home.

At Spire Solicitors LLP, we are members of the Law Society’s Conveyancing Quality Scheme and have extensive experience both in acting for individuals buying new build homes and for Housing Associations in connection with shared ownership schemes.

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