Shared ownership gives buyers a route into homeownership by purchasing a share — typically between 25% and 75% — of a property and paying subsidised rent to a housing association on the remainder. As your circumstances improve, you can buy additional shares (staircasing) until you own 100%. Understanding how CGT applies at each stage helps you plan ahead.
Owning your share: the base cost
When you purchase a shared ownership property, your base cost for CGT is what you paid for your initial share, plus acquisition costs (solicitor's fees, any SDLT on the initial share purchase). You do not acquire the whole property — you acquire a proportional interest.
The rent you pay to the housing association is income paid for the use of the share you do not own. It is not a capital cost and does not increase your base cost.
Staircasing: buying additional shares
Each time you staircase — purchase an additional percentage of the property — you make a new acquisition at the price charged by the housing association for that additional share. Each share purchase has its own base cost.
When you eventually sell, your total base cost is the sum of:
- Initial share purchase price plus acquisition costs
- Each subsequent staircasing price plus acquisition costs
- Capital improvement expenditure on the property
There is no CGT event when you staircase — you are acquiring more of the property, not disposing of anything. The cost of each stage is simply accumulated.
Selling your shared ownership share
If you sell your shared ownership share — whether at 25%, 50%, or any other percentage before reaching 100% — you are disposing of a fractional interest in UK residential property. The gain is the proceeds you receive for your share minus the base cost of that share (all the acquisition costs accumulated to that point).
The 60-day CGT return applies if there is a chargeable gain after reliefs.
Private Residence Relief applies if the property was your only or main home throughout your period of ownership (which it typically will be for shared ownership buyers, since the main purpose of the scheme is to provide affordable owner-occupied housing). If PRR fully covers the gain, no 60-day return is required.
If you moved out and let the property at some point, PRR only covers the periods of occupation. A period of letting does not attract lettings relief under current rules unless you were occupying the property at the same time as the tenants.
Selling at 100% ownership (after full staircasing)
Once you have staircased to 100% ownership, you own the property outright in the same way as any other owner. A subsequent sale is a straightforward disposal. CGT applies in the normal way, and the 60-day return is required if there is a chargeable gain.
The base cost at this point is the total of all share purchases over the years, plus all acquisition costs and capital improvements.
Help to Buy and shared ownership together
Some shared ownership schemes were purchased with Help to Buy equity loans applied to the purchased share. On sale, the Help to Buy repayment (based on the percentage of full market value at the time of sale) is a repayment of the government's equity in the property, not a deduction from your proceeds for CGT purposes. Your proceeds are the full amount received from the buyer for your share, before the Help to Buy repayment.
Practical points
For shared ownership property, good records of every staircasing transaction are essential. The housing association should provide a completion statement for each share purchase showing the price paid. Keep these alongside the original purchase documents and any capital improvement records.
If you are selling your shared ownership property and have a chargeable gain after PRR, the 60-day return obligation applies. Start your return at LetsFile — a Chartered Accountant/Chartered Tax Advisor assembles the full ownership history across all share purchases and files accurately within 24 hours.