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When you buy a shared ownership property, you’re taking on the responsibilities of both a homeowner and a tenant – which means there are several regular costs to budget for. But which bills exactly are you responsible for? In this blog, we outline who pays for stamp duty, ground rent, solicitor fees, and more. So, first things first, what are you responsible for paying for when you have a shared ownership property?
If you own part of a property, you’ll have to pay for your part of the mortgage, as well as rent on the percentage of the property you don’t own. Other monthly bills you’ll be liable for include service charges, council tax, ground rent, electricity, gas, water, and contents insurance.
Keep reading to learn which bills you’re responsible for with owning a shared ownership home,what the housing association pays for, and how to plan for the road ahead.
As with any type of property ownership, you,are responsible for not only your share of the mortgage but also rent payments, which are paid monthly to your housing association. In addition to rent and mortgage repayments, you will usually be responsible for the following bills:
The good news is that your landlord will be responsible for building insurance, however, you’ll still need to take out contents insurance to protect your own belongings.
To get a better idea of what you can afford, take a look at our Shared Ownership affordability calculator.
Stamp duty land tax (SDLT) can be a little more complex with shared ownership. First-time buyers purchasing a home worth less than £300,000 may be exempt from paying stamp duty entirely. If your property is valued above that threshold, or if you’re not a first-time buyer, you may need to pay stamp duty. However, with shared ownership, you can either:
Discuss the best SDLT route with your solicitor. If you’re planning to own the property for many years to come, you may be better off paying the stamp duty upfront on the current market value of the home (as this may increase further down the line!). However, if you don’t plan on staircasing, i.e. buying more shares in the property, you may not want to pay the full amount for stamp duty.
Yes, as you’re the one purchasing a share of the property, you’ll be responsible for sourcing and paying for a solicitor to represent your side of the purchase. Your housing association will likely have a team of in-house solicitors who can liaise with yours to complete the purchase.
The cost of a conveyancer/solicitor ranges anywhere from £500 to £2,000, depending on where you are based, how complex your purchase situation is (for example, if you have a LISA, Help-To-Buy-ISA, or gifted deposit), if you’re buying alone or with someone else, and the property’s overall value. Make sure to get a few quotes and shop around so you understand exactly what’s included in the cost.
Yes – as the occupier of the property, you are solely responsible for paying council tax. If you are a single-person household (or you are sharing with someone else, under the age of 18), you will be eligible for a ‘single person discount’, which will reduce your council tax bill by 25%. If you live with a partner, friend, or child over the age of 18, you’ll pay the normal rate of council tax.
Even though you own a proportion of your property, you are still entirely responsible for service charges, management fees, and ground rent. The fee not only covers the landlord’s building insurance, but also the upkeep of communal areas, rent of the ground beneath our property, and any administration charges incurred by the landlord.
Yes, there absolutely are – and it’s important to factor these in when working out whether shared ownership is affordable for you. While shared ownership is often more accessible than buying a property outright, there are still several upfront costs you’ll need to budget for before you can get the keys in your hand.
Rent is calculated by applying a percentage (usually around 2.75%) to the share of the property you don’t own. This annual amount is then divided into monthly payments. For example, if you own 25% of a £200,000 property, you’ll pay rent on the remaining 75% (£150,000). At a rent rate of 2.75%, that’s £4,125 per year, or £343.75 per month.
To learn more about how much rent you’ll be expected to pay as part of a shared ownership scheme, read our helpful blog: Why Do You Pay Shared Ownership Rent?
When you staircase your property ownership – aka, when you buy a larger percentage of the property from your housing association – your bills largely stay the same. You’ll still be liable for council tax, service charges, electricity, water, etc, but you will have to pay a larger percentage of the rent. This will be changed in line with your new ownership percentage.
For over 20 years, Plumlife has been making home ownership easier in the North West, Yorkshire and beyond. With a number of options available to you, our helpful team is bound to find a property that suits not only your budget, but your lifestyle too. Start your journey with Plumlife today – get in touch with us.
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