What are the tax implications when you sell a shared ownership property?

Full answer

**What is shared ownership?** Shared ownership lets you buy a share (typically 25–75%) of a property and pay rent on the remaining share (owned by a housing association). You can increase your share over time through a process called "staircasing." **CGT on sale** When you sell your shared ownership property: - You have a capital gain on the share you own (purchase price of your share vs. sale proceeds from your share) - If the property has been your main home throughout, **Private Residence Relief (PRR)** eliminates the gain - PRR applies proportionally if you let the property or it was not always your main home **Example: Sarah** Sarah bought a 50% share of a £200,000 property for £100,000. Five years later, she sells. The property is now worth £280,000; her 50% share = £140,000 proceeds. - Gain: £140,000 − £100,000 = £40,000 - PRR (used as main home 100% of time): relief = £40,000 - CGT = £0 **SDLT on staircasing** When you buy additional shares: - Initial purchase: SDLT paid on total market value of property (not just your share) — but first-time buyers' relief applies - Staircasing to 80%+: SDLT on each staircasing transaction - If you staircase to 100%, SDLT on the value of shares purchased **Selling before staircasing to 100%** If you sell with less than 100% ownership, you receive proceeds only for your owned share. The housing association's share is handled separately — they may have a right to nominate a buyer or buy back first. **Leasehold considerations** Shared ownership properties are usually leasehold. The lease length affects CGT calculation if you sell (shorter leases reduce value) and mortgage availability. Lease extension rights apply.

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