First-Time Buyer Shared Ownership Stamp Duty Relief

History of FTB Shared Ownership Relief

First-time buyer SDLT relief was introduced in November 2017, but initially the extension to shared ownership transactions was less clear. In November 2018, the government formally extended FTB relief to cover all qualifying shared ownership purchases, with the extension made retrospective to November 2017.

This means any shared ownership purchase made between November 2017 and November 2018 may have been eligible for FTB relief even if it was not originally claimed. Buyers in that window who did not claim may have been entitled to a refund.

The relief is confirmed in GOV.UK — Shared ownership property SDLT and detailed in the specific extension of FTB relief to shared ownership guidance.

How the Relief Works

When a first-time buyer purchases a shared ownership property, the SDLT calculation depends on whether the market value election is made. For most buyers, the standard approach (without the market value election) is more beneficial:

Without market value election (standard approach):

• SDLT is calculated on the lease premium (the share purchase price) only
• FTB relief rates apply: 0% on first £300,000, 5% on £300,001–£500,000
• The £500,000 cap applies to the FULL MARKET VALUE of the property, not just the share price
• Subsequent staircasing will attract SDLT when cumulative ownership reaches 80%+

With market value election:

• SDLT is calculated on the full market value upfront
• No further SDLT on staircasing below 80%
• FTB relief still applies BUT only if market value is £500,000 or less
• Typically only beneficial for buyers planning rapid staircasing

The £500,000 Market Value Cap

The most important rule to understand about FTB shared ownership relief is that the £500,000 price cap applies to the full market value of the property, not the value of the share being purchased.

This makes the relief particularly important in regional markets. In many areas of England outside London and the South East, shared ownership schemes offer properties with full market values well under £500,000, meaning the relief applies in full.

In London, where average shared ownership property values frequently exceed £500,000, many FTB buyers in shared ownership schemes will not benefit from the relief at all.

Market Value Election: Avoid This for Most Buyers

Buyers purchasing a shared ownership property can choose to make a “market value election” under SDLT rules. This means paying SDLT on the full market value of the property upfront (rather than just the share), in exchange for no SDLT liability on future staircasing transactions below 80%.

For most first-time buyers, this election is NOT advisable. Here's why:

• If the full market value is under £300,000, FTB relief means you pay 0% either way — the election makes no difference on the initial SDLT
• If the full market value is £300,001–£500,000, the election means paying 5% on the portion above £300,000 upfront, versus paying nothing until staircasing
• Most shared ownership buyers do not rapidly staircase, so deferring SDLT is typically better for cash flow
• If you never staircase above 80%, the election would have resulted in overpaying SDLT

According to the SDLT relief for first time buyers guidance, the election is an irreversible choice — once made, it cannot be reversed. Always discuss with your solicitor before electing.

SDLT on the Lease Premium (Rent)

Shared ownership involves both a purchase element (the share) and a rental element (rent on the landlord's share). SDLT can technically apply to both elements separately:

• Purchase premium SDLT: Calculated on the share purchase price (with FTB relief if applicable)
• Lease premium (rent) SDLT: Calculated using a net present value formula on the rent payable over the lease term

For qualifying FTB shared ownership transactions where the full market value is £500,000 or less, the lease premium SDLT is effectively nil-rated. The 0% FTB relief rate applies to the rent component, so no additional SDLT is payable on the rent.

For non-FTB shared ownership buyers, or where the market value exceeds £500,000, a separate SDLT calculation on the lease premium may apply. Use our shared ownership calculator to see both components.

Worked Examples

Staircasing and FTB Relief

Staircasing is the process of buying additional shares in your shared ownership property over time, typically in minimum 10% increments. FTB relief does not apply to staircasing transactions — it applies only to the initial share purchase.

The reason is straightforward: once you have purchased your initial share, you are no longer a first-time buyer. Any subsequent staircasing is a purchase by an existing homeowner, so FTB eligibility no longer applies.

See our dedicated guide on staircasing stamp duty for full details on when SDLT applies during staircasing and how to calculate it.

SDLT on Staircasing Transactions

Unless you made the market value election at initial purchase, SDLT on staircasing follows specific rules:

• Each individual staircasing transaction below 80% cumulative ownership: no SDLT payable
• When cumulative ownership first reaches 80% or more: SDLT becomes payable on the transaction that tips you over 80%
• SDLT at that point is calculated on the current market value of the staircasing transaction
• Standard rates apply at the point of staircasing — no FTB relief

For full guidance on the initial share purchase, see our guide on initial share purchase stamp duty.

Eligibility Requirements

To claim FTB relief on a shared ownership purchase, all standard FTB eligibility criteria must be met:

• You (and all joint buyers) must never have owned a residential dwelling anywhere in the world
• The property must be intended as your main residence
• The full market value must not exceed £500,000
• You must NOT elect for the market value election if you want to benefit from FTB relief on just the share
• The property must be a qualifying shared ownership scheme

For the complete FTB eligibility rules, use our FTB eligibility checker.

FTB Shared Ownership vs Standard Rates

*At market value above £500,000, no FTB relief applies. Standard rates on share price shown.

Frequently Asked Questions

Sources

1. GOV.UK — Shared ownership property SDLT
2. GOV.UK — FTB relief extension to shared ownership
3. GOV.UK — SDLT relief for first time buyers