Quick Summary
- Sale proceeds split by percentage, not by the original cash amounts — if the government holds 30%, it gets 30% of whatever the home sells for, whether prices rose or fell
- You can buy the government out in steps of at least 5% a year — priced at the current market value each time, with you paying the valuation, legal and administration costs
- Some agreements include a 10% "golden share" the Scottish Government keeps permanently in pressured housing areas — check your title documents before planning a full buyout
- Work out the mortgage side first with the Mortgage Affordability Calculator — a bigger share usually means a bigger loan
You bought through LIFT years ago, and now you're moving — or you'd like the government off your title deeds. Here's exactly how both routes work.
Quick Answer: When you sell a LIFT home (OMSE or NSSE), you get your percentage of the sale price and the Scottish Government gets theirs — a 70/30 split of a £200,000 sale pays you £140,000 (before clearing your mortgage) and the government £60,000. Alternatively you can increase your stake while you stay: a minimum of 5% per year, priced on a fresh independent valuation, until you own 100% — unless your agreement contains a permanent 10% golden share.
How the split works when you sell
The shared equity agreement you signed at purchase fixes the percentages, not the cash values. The Scottish Government's stake rises and falls with your home's value, exactly as yours does.
Worked example: prices rose
You bought at £160,000 with a 25% government stake (£40,000 of their money, £120,000 of yours via deposit and mortgage). Eight years later you sell for £200,000:
| You (75%) | Scottish Government (25%) | |
|---|---|---|
| Stake at purchase | £120,000 | £40,000 |
| Share of £200,000 sale | £150,000 | £50,000 |
| Gain | +£30,000 | +£10,000 |
Your £150,000 first repays your outstanding mortgage; the rest is yours — typically the deposit on your next home. The government's £10,000 gain is the price of the help: they shared the risk, so they share the growth.
Worked example: prices fell
Same purchase, but you sell for £140,000:
| You (75%) | Scottish Government (25%) | |
|---|---|---|
| Stake at purchase | £120,000 | £40,000 |
| Share of £140,000 sale | £105,000 | £35,000 |
| Loss | −£15,000 | −£5,000 |
This is the underrated upside of shared equity: the government shares losses proportionally. You are not required to repay their original £40,000 — only 25% of whatever the home is now worth. Compare that with Help to Buy-style equity loans, where a falling market can still leave you owing more than your share of the equity.
Watch the mortgage, though. If your sale share won't clear your outstanding mortgage balance, you're in negative equity on your own slice, and your lender must agree to the sale. The government's percentage comes off the top of the sale price — it isn't reduced to bail out your loan.
The selling process, step by step
- Tell the administering body (Link Homes for most OMSE purchases, or the housing association for NSSE) that you intend to sell
- Market the home normally — estate agent, Home Report, offers in the usual Scottish way
- Your solicitor handles the split at settlement — the government's percentage goes to the Scottish Ministers, your percentage repays your mortgage with the balance to you
- The shared equity security is discharged from the title as part of conveyancing
What selling costs you
Selling costs are yours alone, as the owner-occupier — the Scottish Government doesn't contribute towards them even though it shares the proceeds:
| Cost | Who pays | Notes |
|---|---|---|
| Estate agency fees | You | Usually a percentage of the sale price, agreed up front |
| Home Report | You | Mandatory for almost all Scottish sales; typically £300–£600 depending on property size |
| Your solicitor | You | Handles both the sale and the discharge of the shared equity security — slightly more paperwork than a standard sale |
| LBTT | The buyer | Sellers pay no LBTT |
| Capital gains tax | Nobody (usually) | Your only or main residence is exempt from CGT |
The one cost that sometimes surprises LIFT sellers is the extra conveyancing work: your solicitor must coordinate with the Scottish Government's solicitor to discharge the equity security at settlement, which can add modestly to the legal bill and the timeline. Mention the shared equity agreement when you first instruct, not at the end.
Try it yourself
Selling to move up the ladder? See what you could borrow next — including LBTT on the new purchase.
Open Mortgage Affordability CalculatorNo sign-up required.
Increasing your share while you stay
You don't have to sell to change the split. The scheme lets you buy additional equity from the Scottish Government — sometimes called staircasing — under three key rules:
- Minimum 5% per move. You must increase your stake by at least 5% in a year — you can't drip-buy 1% at a time
- Priced at today's value. Each purchase needs a fresh independent valuation; you buy at the current market value of the percentage, not the original price
- You pay the costs. The valuation fee, your legal costs, and the administering body's administration charge all fall to you
Repeat as your finances allow — 70% to 80%, later 80% to 100%. Once you own 100%, the government's standard security is discharged and the home is entirely yours.
What a 10% step costs
Your home was £160,000 at purchase; it's now valued at £180,000. Buying 10% from the government costs 10% × £180,000 = £18,000, plus the valuation, legal and admin fees. If the value had instead slipped to £150,000, the same 10% would cost £15,000 — which is why a flat or falling market is the cheapest time to staircase.
When buying out makes sense — and when it doesn't
Worth considering when:
- Values are flat or down — you acquire the government's slice cheaply
- Your income has grown and you can remortgage to fund the purchase at a sensible loan-to-value
- You're planning to stay long-term in a rising area — every year you wait, their 25% gets dearer
- You want to remove scheme conditions — full ownership ends the subletting restriction and any future administration
Often better to wait when:
- You expect to sell within a few years anyway — you'd pay valuation and legal costs now to achieve much the same financial outcome at sale
- The money would come from expensive borrowing — swapping a free equity stake (no rent, no interest) for interest-bearing debt needs a clear reason
- Prices are rising fast — counterintuitively, you may still do better investing spare cash elsewhere than buying out a stake that costs more each year; the government's share never charges you a penny while you hold it
Remember what you're replacing: the government's stake costs you nothing monthly. Unlike English shared ownership (where staircasing kills off rent), buying out a Scottish shared equity stake doesn't reduce your outgoings — it converts future sale proceeds from theirs to yours. It's an investment decision, not a cost-saving one.
The golden share: when 90% is the ceiling
In areas with persistent shortages of affordable housing — typically rural and island communities — the Scottish Government retains a permanent 10% stake known as a "golden share". If your agreement includes one, you can staircase to 90% but never to 100%, and when you sell, the home goes to another eligible buyer with the 10% intact. The point is to stop scarce affordable homes leaking permanently into the open market.
Whether you have one is a fact of your individual agreement, not your council area in general. Check your shared equity agreement or ask your solicitor before building plans around full ownership.
Other rules that follow the home
- No subletting. The home must remain your only or main residence; letting it out breaches the agreement as a general rule. If life takes you elsewhere, the options are selling, or buying out the government first
- Remortgaging needs consent. You can switch deals, but the administering body must approve arrangements affecting the title — and the costs are yours
- Repairs and improvements are 100% yours. You maintain the whole home even though you own part of it. Note the flip side: money you spend on improvements lifts the value of the government's share too, and the valuation used at sale or staircasing doesn't carve out your renovation spending
Try it yourself
Model the original equity split — deposit, mortgage size, and monthly payment on your share.
Open LIFT Shared Equity CalculatorNo sign-up required.
Frequently Asked Questions
Do I repay what the government originally paid, or the current value?
The current value, always. The government owns a percentage, not a fixed sum. If they funded £40,000 as 25% and you sell at £200,000, they receive £50,000; if you sell at £140,000, £35,000. The same logic prices any staircasing purchase.
Can I buy out the Scottish Government's share in one go?
Yes — there's no requirement to do it gradually. The 5% rule is a minimum per step, not a maximum. A single 100% buyout needs one valuation, one legal process, and (unless a golden share applies) ends the scheme's involvement entirely.
What is a golden share in a LIFT home?
A permanent 10% stake the Scottish Government keeps in designated pressured-market areas, capping your maximum ownership at 90%. It survives a sale — the next buyer takes the home subject to it. Your shared equity agreement states whether one applies; your solicitor can confirm.
What if my home loses value — do I still owe the full government contribution?
No. Shared equity means shared downside: the government simply takes its percentage of the lower sale price. You don't top them back up to their original contribution. Your own risk is your mortgage — if your share of a depressed sale price won't clear the loan, that shortfall is yours to resolve with your lender.
Do I pay LBTT or capital gains tax when selling or staircasing?
Selling: no LBTT (that's the buyer's tax) and normally no CGT, because the home is your main residence. Staircasing: buying additional equity in your own home doesn't generate an LBTT charge in the way a new purchase does, but legal fees apply — your solicitor will confirm the position for your transaction size.
Who do I contact to start a sale or buyout?
For OMSE purchases, the administering agent is Link Homes — lift@linksharedequity.co.uk or 0330 303 0125. For NSSE homes, contact the housing association or council you bought through. Start there before instructing an estate agent, so the equity-share paperwork runs alongside the marketing.
Related Articles
- LIFT Scheme Scotland: The Full Guide — eligibility, OMSE vs NSSE, and how to apply in the first place
- OMSE Price Thresholds Explained — what you can buy, area by area and size by size
- First-Time Buyer Scotland Guide — the full Scottish buying process for your onward purchase
- LBTT Explained: Scotland's Property Tax — what your buyer pays, and what you'll pay on your next home
- Capital Gains Tax in Scotland — why your main residence is exempt, and when CGT does bite
This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax rates and thresholds can change — always verify current rates with Revenue Scotland, HMRC, or mygov.scot, and speak to a qualified financial adviser for advice specific to your circumstances.
Sources
- mygov.scot — OMSE: after buying (increasing your share, golden share, selling): mygov.scot/open-market-shared-equity-scheme/after-buying
- mygov.scot — OMSE: how it works: mygov.scot/open-market-shared-equity-scheme/how-it-works
- mygov.scot — New Supply Shared Equity scheme: mygov.scot/new-supply-shared-equity-scheme
- Scottish Government — LIFT policy overview: gov.scot/policies/homeowners/low-cost-initiative-for-first-time-buyers