Staircasing Stamp Duty: Additional Share Purchases

What Is Staircasing?

Staircasing is the process of buying additional equity in your shared ownership property from the housing association. When you initially bought your share — say 40% — the lease granted you the right to purchase more shares over time. Each time you buy an additional percentage, you are staircasing. You can staircase as many times as you like (subject to your lease terms) until you reach 100% ownership.

The price you pay for each additional share is based on the current open market value of the property at the time of that specific staircasing transaction. If your property has increased in value since you first bought, you will pay more per percentage point than you did initially. This is why property value growth affects the total SDLT liability under the staircasing election.

For context on how your initial election affects whether you pay SDLT at all on staircasing, see the market value election guide. If you made the market value election at your initial purchase, you pay no SDLT on any staircasing transaction — full stop. The rules on this page only apply if you chose the staircasing election.

When SDLT Applies on Staircasing

Under the staircasing election, each staircasing transaction is assessed separately for SDLT. The rules differ significantly depending on your cumulative ownership level before and after the purchase. There are two distinct regimes:

Staircasing Below 80% Threshold

When your total ownership remains below 80% after a staircasing purchase, SDLT is calculated on the consideration paid for that specific additional share. The consideration is simply the price the housing association charges you for the extra percentage, which is based on a RICS valuation of the whole property at that time.

Standard SDLT rates apply to this consideration: 0% up to £125,000, 2% on £125,001 to £250,000, and 5% on £250,001 to £925,000. Because staircasing purchases are typically smaller increments — buying 10% or 20% at a time — the consideration for each purchase often falls below £125,000, especially on properties up to around £500,000. This means many staircasing transactions below the 80% threshold result in zero SDLT.

Note that first-time buyer relief does not apply to staircasing purchases. By the time you are staircasing, you already own a residential property (your initial share), so you are no longer a first-time buyer. Standard SDLT rates apply to all staircasing transactions.

The 80% Rule Explained

The 80% rule is a critical boundary in shared ownership SDLT. Once your cumulative ownership reaches or exceeds 80% through a staircasing transaction, the basis for calculating SDLT changes from consideration paid to market value of the share acquired. This is not a cliff edge that applies to all of your shares at once — it applies to the specific share purchase that takes you to or beyond 80%.

The market value of the share being acquired will always be at least as much as the consideration you pay. In theory they should be equal (because the price is based on a current RICS valuation). In practice, the difference between price paid and market value for a specific staircasing transaction is usually minimal. However, the rule ensures that HMRC can verify the SDLT is calculated on a defensible market-derived figure rather than a potentially discounted price.

How Consideration Is Calculated

The consideration for a staircasing purchase is the price agreed between you and the housing association for the additional share. Housing associations are required by their rules to sell staircasing shares at market value — they cannot sell at a discount below market value. Before each staircasing transaction, you commission an RICS valuation of the whole property, and the share price is calculated as a percentage of that valuation.

For example: you own 50% of a property that was worth £300,000 when you bought it. You now want to buy an additional 20% share. An RICS valuation establishes the current market value at £360,000. The housing association charges you 20% of £360,000 = £72,000. This £72,000 is both the consideration and (under the below-80% rule) the basis for your SDLT calculation.

The RICS valuation is usually valid for three months. If your staircasing transaction takes longer than three months from the valuation date, a new valuation will be required. This can affect the price and therefore the SDLT calculation.

Example: Buying Additional 10% Share

Example: Buying Additional 20% Share

Example: Buying Additional 30% Share

Filing Requirements

Each staircasing transaction may require an SDLT1 return to be filed with HMRC within 14 days of the effective date of that transaction. The effective date is normally the completion date of the staircasing purchase.

Under SDLT rules, transactions are not notifiable where the consideration is under £40,000 and no SDLT is due. However, where consideration exceeds £40,000, a return is required even if the SDLT due is zero. Since many staircasing transactions involve consideration above £40,000 (e.g. 10% of a £500,000 property = £50,000), a return is needed even though SDLT is zero.

Your solicitor handles the SDLT return for each staircasing transaction. The Land Registry requires evidence of the SDLT filing (an SDLT certificate) before registering the updated ownership title reflecting your higher share. This is standard practice and your solicitor will manage the entire process.

Strategic Planning to Manage Staircasing SDLT

Under the staircasing election, careful timing and sizing of staircase purchases can reduce your total SDLT liability over the full ownership journey. Several strategies are worth considering:

Staircase in small increments below the threshold: If the property is valued at £500,000 or less, buying 10–20% at a time keeps each individual staircase consideration well below £125,000, generating zero SDLT on each transaction.

Avoid straddling the 80% threshold: If you are at 70%, buying 20% takes you to 90% and crosses the 80% line. At a moderate property value this may cost little in SDLT anyway, but for high-value properties you might prefer to do 10% (to 80%) and then a second staircase for the remaining 10%.

Jump straight to 100%: If you are close to being able to afford full ownership, going directly from your current share to 100% in one transaction means only one SDLT filing and consideration is calculated only on the final share. See the final staircasing guide for how this is calculated.

Moving to Final Staircasing

When you are ready to buy the final share and reach 100% ownership, different considerations apply. The final staircasing to 100% guide covers the SDLT calculation on that last purchase, the transition from leasehold to potential freehold, and mortgage and legal considerations specific to becoming a full owner.

For context on how the shared ownership journey fits together from start to finish, the shared ownership complete guide provides an overview of all SDLT touchpoints across the entire lifecycle.

Calculate Your Staircasing SDLT

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Frequently Asked Questions