Are you eligible for a Stamp Duty refund?

Stamp Duty Land Tax is a tax which is required to be paid when a house sale is completed. An SDLT return should be sent to HMRC and the tax must be paid within 14 days of completion.

Those with a solicitor, agent or conveyancer will usually file the return and pay the tax on the buyer’s behalf, adding the amount to their fees. There are some instances where a relief on SDLT may be available.

What’s more, some people will be exempt from paying Stamp Duty Land Tax.

There are some situations when those who have paid the tax will be able to get some of their money back.

An instance of this is anyone who paid SDLT on a shared ownership property between November 22 2017 and October 29 2018, and were eligible to claim the first-time buyer’s SDLT relief.

This relief is a discount which a person may can claim on their home, if they completed the purchase on or after November 22, 2017, and they and anyone else they are buying with are first-time buyers.

In order to qualify, the property must be priced at £500,000 or less.

The first £300,000 of the value of the property is then tax-free, while any further portions between £300,001 and £500,000 are taxed at a rate of five per cent.

...We will make this relief retrospective so any first time buyer who has made such a purchase since the last Budget will benefit

Phillip Hammond, Chancellor of the Exchequer

In The Budget 2018, Chancellor of the Exchequer Phillip Hammond announced a retrospective relief for first-time buyers who purchased a shared ownership property.

He said in the speech: “And we will make this relief retrospective so any first time buyer who has made such a purchase since the last Budget will benefit.”

Should a person have paid the SDLT but did not get the relief which in retrospect they are now eligible for, it’s possible to apply for a refund.

The Gov.uk website advises that this can be done by writing to HMRC.

One should include details such as the Unique Transaction Reference Number (UTRN) from the SDLT return, how much was overpaid, as well as a relevant bank or building society account name, number, and sort code.

The deadline for submitting applications for this refund is later this year, on October 28.

Another instance in which a person may be able to reclaim a portion of the tax that they paid is if they were required to pay higher rates of SDLT for additional properties.

Gov.uk explains: “You’ll usually have to pay three per cent on top of the normal SDLT rates if buying a new residential property means you’ll own more than one.”

Buyers who are replacing their current main residence by buying a new property will not be required to pay this additional amount.

However, if there’s been a delay in the sale and it hasn’t been sold on the day of completing the new purchase, then one may need to pay the higher tax.

A buyer who sells their previous main home within 36 months may be able to get a refund, either online or by filling in the relevant form and sending it to HMRC.