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Shared ownership is a government-backed scheme that allows buyers to purchase a percentage of a property and pay rent on the remainder. When the shared owner dies, their leasehold share passes through the estate — but the process is more complex than inheriting a standard freehold or leasehold property, because the housing association retains significant rights.
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Under shared ownership, the buyer purchases a share of a property — typically between 25% and 75% — and pays a subsidised rent on the remaining share to the housing association. Buyers can "staircase" (purchase additional shares) up to 100% ownership over time.
The buyer holds the property on a long leasehold basis, and the housing association retains the freehold. This means the estate owns a leasehold interest, not a freehold.
On the death of a shared owner, the estate inherits the leasehold share that was purchased. For example, if the deceased owned a 50% share of a property valued at £300,000, the estate inherits a leasehold interest with a probate value of approximately £150,000 — subject to the lease terms and any outstanding mortgage.
The estate does not inherit the full property. The housing association continues to hold the unsold equity, and rent on that equity does not transfer to a new owner without a new lease arrangement.
For the full probate process, see our complete UK probate guide 2026.
Most shared ownership leases include a pre-emption clause — also called the right of first refusal. Under this clause, when the shared ownership property is to be sold, the housing association has a period (typically 8 weeks) to find a buyer at the agreed market value before the estate can sell on the open market.
This applies to sales by the estate as well as voluntary sales by living owners. The executor must follow the procedure set out in the lease, which typically involves:
A beneficiary can inherit and continue to live in a shared ownership property, but they will need to:
If the beneficiary does not meet the eligibility criteria, they will not be permitted to keep the property. The estate will need to sell instead.
Service charges and rent on the unsold equity do not pause on the death of the shared owner. The estate is responsible for these costs from the date of death until the property is transferred or sold. Executors should:
Arrears can accrue quickly. Housing associations can seek possession for rent arrears in the same way as any landlord, so prompt action is important.
Shared ownership leases are typically granted for 99 or 125 years. If the original lease was granted many years ago, the remaining term may be significantly shorter. A lease with fewer than 80 years remaining is harder to mortgage and can lose value rapidly.
The executor should check the remaining lease term and, if it is approaching 80 years, consider whether a lease extension should be pursued before selling. For more on this, see our guide to leasehold property and lease extension during probate.
For IHT purposes, the value of the shared ownership share is the estate's interest in the property — i.e., the percentage owned multiplied by the open market value of the whole property. Any outstanding mortgage on the share is a deductible liability.
The main residence nil rate band (RNRB) may be available if the property is being left to a direct descendant — but it only applies up to the value of the share actually owned, not the full property value. Read more in our inheritance tax UK 2026–27 guide.
Use our estate administration checklist, applying for probate guide, and executor first steps guide for the broader process. For the first steps after a death, see what to do when someone dies. For selling the property, see our selling a probate property guide. For the IHT400, see our IHT400 guide. For CGT on inherited property, see our CGT on inherited assets guide. Farra can help — get started here.
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