Two ways to pay
Shared ownership is unusual because SDLT gives you a genuine choice at the point of your first purchase, and the choice is permanent. Understanding both routes is essential because the wrong pick can cost thousands if your plans change.
The market value election means you pay SDLT upfront as though you had bought the whole property at its full market value, even though you only own a share. The big advantage is certainty: once you have paid, you never owe more SDLT, however many times you staircase, even all the way to 100 percent. It suits buyers who expect to staircase fully and want to avoid future bills as prices rise.
Paying in stages means you only pay SDLT on the initial share you buy (plus a possible amount on the rent if the net present value of the rent is high enough). You then pay nothing further until your cumulative ownership exceeds 80 percent. This keeps upfront costs lower, which suits buyers who are unsure whether they will staircase or want to minimise initial outlay.
The election is a one-time choice
You decide between the market value election and paying in stages at your first purchase, and it cannot be changed later. Think about whether you are likely to staircase to 100 percent before you choose.
Market value election vs paying in stages
Each route trades off upfront cost against future certainty.
| Feature | Market value election | Paying in stages |
|---|---|---|
| When you pay | Upfront on full market value | On each share as you buy it |
| Future SDLT on staircasing | None, ever | Due once total share passes 80 percent |
| Upfront cost | Higher | Lower |
| Best for | Those planning to staircase to 100 percent | Those unsure or buying a small share |
| First-time buyer relief | Can apply | Can apply |
Key points to remember
- You choose how to pay SDLT at your first shared ownership purchase only.
- The market value election means no further SDLT however much you staircase.
- Paying in stages defers SDLT until your total share passes 80 percent.
- First-time buyer relief can apply to qualifying shared ownership buys.
- Scotland and Wales have their own rules under LBTT and LTT.
Working out your stamp duty
Confirm the scheme qualifies
The rules apply to approved shared ownership schemes run by qualifying providers.
Get the market value
You need the full market value to compare the election with staged payment.
Check first-time buyer relief
If eligible, relief can reduce or remove SDLT on your initial purchase.
Compare the two routes
Weigh higher upfront cost against future certainty if you plan to staircase.
Take advice
A conveyancer can model both options and confirm what is due in your case.
Plan for staircasing
If you chose to pay in stages, budget for SDLT once you pass 80 percent.