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First-time buyers: how to reclaim stamp duty paid on shared ownership properties

Paloma Kubiak
Written By:
Paloma Kubiak

The 2018 Budget saw the Chancellor announce a retrospective change for first-time buyers of shared ownership properties, meaning hundreds of people can claw back the tax charge. Here’s how.

When buying a shared ownership property, stamp duty can be paid as a one-off payment based on the total market value of the property or in stages (as you increase ownership).

Yesterday’s Budget saw Philip Hammond confirm that stamp duty relief for first-time buyers in England and Northern Ireland would be extended and backdated to shared ownership property purchases.

At last year’s Budget, the Chancellor unveiled a cut in stamp duty for first-time buyers for properties up to £300,000 and it also applies to the first £300,000 for properties worth up to £500,000. Though for properties costing above £300,000 up to £500,000, a 5% stamp duty charge is applied.

While the stamp duty relief did apply to first-time buyers purchasing shared ownership properties, it was limited.

It only applied where first-time buyers elected to pay stamp duty on the full market value of the property (first £300,000 up to £500,000 as above) or on the first share of the property purchased, for example 25%.

However, the relief didn’t apply to subsequent purchases of the share of the property, where an owner wants to staircase from say 25% to 50% of ownership.

But the Treasury has now confirmed that the first-time buyer stamp duty relief will apply to subsequent share purchases, bringing it in line with the process of buying a leasehold or freehold property.

It expects around 1,700 transactions to benefit each year.

And Hammond confirmed that this change will be backdated to 22 November 2017 (last year’s Budget), so any first-time buyers who paid stamp duty on subsequent share purchases from this date, will be able to claim the tax back.

How to reclaim stamp duty relief

If you fall into this category, you should get in touch with HM Revenue & Customs (HMRC). A claim needs to be done in writing to HMRC, giving relevant details of the transaction.

You’ll need to explain the reason why an amendment is being made, such as claiming first-time buyers’ relief. You should also give the UTRN for that return – the unique reference number on the original stamp duty return, confirmation of the amount to be refunded and confirmation of who should receive the payment.

You need to claim the refund no later than 28 October 2019. You’ll receive a cheque for the amount, as well as 0.5% repayment interest on top.