Resale Shared Ownership: SDLT on Resale Properties

What Is Resale Shared Ownership?

Resale shared ownership occurs when you buy a shared ownership property from an existing shared owner rather than directly from a housing association on a new build. The existing shared owner may have lived in the property for years and is now selling their stake. This could be because they are moving, relocating for work, or have personal circumstances that require them to sell.

From the buyer's perspective, resale shared ownership offers an alternative route into the shared ownership scheme that is not limited to new developments. Resale properties are often available in more established neighbourhoods where no new shared ownership schemes exist, and they are typically priced to reflect the current market value of the share held.

The shared ownership scheme was originally designed for new builds, but the resale market has grown considerably as the scheme matures and early buyers reach the point of selling. For an overview of how shared ownership SDLT works across the full lifecycle, the shared ownership complete guide provides the full picture from first purchase through to 100% ownership.

SDLT Treatment on Resale

A resale shared ownership purchase is, legally, an assignment of the existing shared ownership lease from the outgoing leaseholder to you. It is not the grant of a new shared ownership lease by a qualifying body. SDLT is calculated on the chargeable consideration for that assignment, which is the price you pay for the resale share.

Standard SDLT rates apply to that price. For example, paying £192,000 for a 60% resale share (60% of a £320,000 property): SDLT = 0% on £125,000 + 2% on £67,000 = £1,340. First-time buyer relief, if you qualify, raises the nil-rate band to £300,000 and would give zero SDLT here.

The previous owner's SDLT history is entirely irrelevant to your transaction. You start fresh with your own SDLT obligation based on the price you pay for the assignment.

No Market Value Election on Resale

The market value election under FA 2003 Schedule 9 paragraph 2 is only available on the grant of a new shared ownership lease. A resale purchase is an assignment of an existing lease, not a grant, so the election does not apply. This is confirmed in HMRC's SDLT shared ownership guidance and in the SDLTM manual (SDLTM27000 onwards). You cannot elect to pay SDLT on the full market value of the property when buying a resale.

SDLT is paid on the price you pay for the assignment of the share. The pay-in-stages rules continue to apply for any later staircasing transactions you make after the resale purchase. That means:

• No further SDLT and no SDLT return for any staircasing tranche you take while your cumulative ownership stays at 80% or below.
• If a later staircasing transaction takes you over 80%, that transaction and any earlier and subsequent staircasing tranches (that you make after the resale) are linked, with SDLT calculated on the cumulative consideration paid for those linked share purchases.

Use our shared ownership SDLT calculator to estimate the SDLT on your resale share assignment price.

The Nomination Period

The nomination period is a contractual provision in most shared ownership leases that gives the housing association the right to find a buyer for the property before it can be marketed more widely. When an existing shared owner wants to sell, they notify the housing association, who then have a defined period, typically eight weeks, to nominate a buyer from their own waiting list.

During the nomination period, the housing association will usually commission a RICS valuation to establish the market value and therefore the asking price for the resale share. If the housing association finds a buyer from their waiting list during the nomination period, the sale proceeds through them. If they do not find a buyer, the existing shared owner is generally free to market the property through estate agents.

As a buyer, you may find resale shared ownership properties through the housing association's own website or waiting list, or through estate agents after the nomination period has expired. The nomination period does not affect your SDLT obligations; these apply regardless of how the property was marketed or sold.

Taking Over the Existing Lease

The legal structure of a resale shared ownership purchase differs from a new shared ownership purchase. In new shared ownership, the housing association grants you a new lease. In resale, you take an assignment of the existing lease from the current shared owner. You step into the shoes of the previous leaseholder and take on all the rights and obligations of the existing lease.

This assignment is legally straightforward but carries some important practical implications. The lease terms, including the rent review mechanism, service charge obligations, repair responsibilities, and staircasing rights, are fixed in the existing lease and cannot be renegotiated. You accept the lease as is. If the previous owner had unusual or onerous terms in their lease, you inherit those.

The housing association must consent to the assignment. This consent is typically given automatically through the nomination process, but your solicitor must formally request it. The housing association will also require evidence that you meet the shared ownership eligibility criteria, such as income limits and not owning another suitable home.

Lease Length Issues

Lease length is one of the most significant practical differences between buying new and resale shared ownership. A new shared ownership lease might start at 99, 125, or even 999 years. A resale property has whatever remains of the original lease term. If the property was bought new 20 years ago on a 99-year lease, only 79 years remain.

This matters enormously for mortgage purposes. Most mainstream lenders require at least 70–85 years remaining on a lease at the end of the mortgage term. For a 25-year mortgage, the lease would need at least 95–110 years remaining at the start. A 79-year lease may make mortgage lending difficult or impossible with many lenders.

A short lease also reduces the property's resale value and can trigger ground rent escalation under some older lease terms. Lease extension is possible and your SDLT implications are separate (see any lease guide for details), but extension adds cost to the overall purchase.

Always check the remaining lease length before making an offer on a resale shared ownership property. Your solicitor will review the lease as part of the conveyancing process, but it is worth asking the estate agent or housing association before proceeding to offer stage.

First-Time Buyer Relief on Resale

First-time buyer relief is available on resale shared ownership purchases provided you meet the standard FTB criteria: you must never have owned, or had a beneficial interest in, a residential property anywhere in the world. The fact that the property is a resale rather than new build is irrelevant; the relief is assessed on the buyer's status, not the property's history.

Under the market value election, FTB relief applies to the full property value if it does not exceed £500,000. The FTB nil-rate band extends to £300,000, with 5% from £300,001 to £500,000. This can significantly reduce or eliminate SDLT on resale properties in this price range.

Under the staircasing election, FTB relief applies to the share purchase price. As with new shared ownership, many initial share values on resale are below £125,000, making FTB relief largely academic, because the SDLT would be zero regardless. But on higher share values (such as 60% of a £350,000 property = £210,000), FTB relief raises the nil-rate band from £125,000 to £300,000, saving £1,700.

Differences from New Shared Ownership

While the SDLT rules are identical, several practical differences distinguish resale from new shared ownership purchases:

Worked Example: Buying 60% Resale Share

Due Diligence on Resale Properties

Resale shared ownership requires more due diligence than buying a new property. The property has been lived in, and while the housing association has maintenance responsibilities for the structure and exterior (under most shared ownership leases), internal condition varies. A survey is highly recommended, more so than on a new build where structural issues are unusual.

Your solicitor should review the existing lease carefully, including: the remaining term, the ground rent provisions (is it escalating, and at what rate?), service charge history and any major works planned, repair and maintenance obligations, and any restrictions on subletting or alterations. These terms are fixed and cannot be renegotiated.

Review the service charge accounts for the last three years. Major works reserves, planned maintenance schedules, and any disputes between the housing association and other residents can all affect your ongoing costs after purchase.

After Your Resale Purchase

Once you complete on a resale shared ownership property, you own the leasehold interest in the existing share and pay rent on the remaining unowned portion, just as with new shared ownership. Your rights to staircase further are governed by the existing lease.

If you later staircase to buy more shares, the SDLT rules that apply are exactly as described in the staircasing stamp duty guide. If you intend to buy the final share and reach 100%, the final staircasing guide covers the SDLT and legal considerations.

If you made the market value election at your resale purchase, no SDLT is ever due on any future staircase transaction. If you used the staircasing election, SDLT is assessed on each future staircase as normal. The elections work exactly the same way as they do for new shared ownership buyers.

Calculate Your Shared Ownership SDLT

Use our calculator to work out the stamp duty on your shared ownership purchase.

Frequently Asked Questions