Shared Ownership and Stamp Duty

If you're considering purchasing a shared ownership property as a single applicant due to exceeding the income threshold as a household, there are some factors you need to consider. 

Let’s break it down to answer your questions regarding joint mortgages and shared ownership, and Stamp Duty on a shared ownership property.

Shared Ownership Eligibility 

For shared ownership in England, your household income must not exceed £80,000 per year (£90,000 in London). The term "household" refers to everyone involved in purchasing the property. Since the combined income of you and your partner exceeds this threshold, only you can apply as a single applicant, as both applicants together would not meet the eligibility criteria. 

Joint Mortgage and Shared Ownership 

While you will need to apply for the property in your sole name to meet the shared ownership eligibility requirements, you may find this a less-than-ideal scenario as a joint mortgage likely won’t be possible. Shared ownership rules generally require the mortgage to match the applicant's name on the lease, meaning that you would need to take the mortgage out in your sole name as well. 

Shared Ownership and Stamp Duty Land Tax (SDLT)

Stamp Duty on shared ownership properties is calculated based on the share of the property that you purchase, not the full market value. However, you do have the option to pay SDLT on the full market value upfront, which can be beneficial if you plan to increase your ownership share over time. Consulting with a conveyancer is advised to understand which option suits your situation best. 

You can work out your Stamp Duty with our calculator.

Shared Ownership: Legal Ownership and Equity 

If your partner is contributing financially, it's important to have a legal agreement in place, outlining the financial contributions and ownership arrangements. This agreement will protect both parties and clarify rights regarding the property, particularly since the property and mortgage will legally be in your name. 

Financial Advice for Shared Ownership 

Given the complexity of shared ownership rules and the specific restrictions around joint applications and mortgages, it’s highly recommended to seek advice from a mortgage advisor. We can offer tailored guidance to ensure you make the right decision. 

In summary, while you can apply for shared ownership as a single applicant due to income restrictions, the mortgage must also be in your name. You’ll only pay Stamp Duty on the share you buy, but legal and financial advice is crucial to protect both your and your partner’s interests. 

If you’d like further assistance, feel free to reach out to one of our independent mortgage advisors at 0330 433 2927 for tailored advice.